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Professional traders never risk more than 1% per trade. Here is exactly why. Back when I lost my first $5,400, I treated my account like a casino, throwing 20% of my capital at a single $ETH long because I was "sure" the breakout was coming. I didn't have a plan; I had a gamble. If you are risking more than 1% of your total account balance on a single trade, you aren't trading; you are praying for liquidity. The rule is simple: never risk more than 1% of your account on one trade. If you have a $1,000 account, that means your absolute maximum loss on any single position is $10.

Let’s look at the survival math because it is the only thing that keeps you in the game when the market turns violent. If you risk 1% per trade,...