#Many traders focus all their effort on "When should I buy?" $FET and miss the most important question: "How much will I lose if I’m wrong?"

The truth is that the market is not forgiving to anyone who enters without a plan.$NEAR Most people who leave the world of trading don’t do so because of faulty analysis, but because risk management is completely absent.

Why is risk management more important than the analysis itself?

Your expectations can be correct 70% of the time, $RENDER yet you can still lose your entire account if your losses on failed trades are larger than your gains on winning trades. The opposite is also true: a trader whose expectations are correct only 40% of the time can still achieve steady profits if they manage the size of their losses intelligently.

In other words: surviving the market isn’t a bet on “who expects more,” but on “who loses less when they’re wrong.”

Basic rules

1. Don't risk more than 1-2% of your capital on a single trade

This rule protects you from a “losing streak” that ends any account. Even if you lose 5 trades in a row, you will have lost less than 10% of your capital only—and this is a figure you can recover from.

2. Set your Stop Loss before entering, not after

Setting the exit point after opening the trade means you’ll make the decision while you’re emotionally influenced by the moving price. Set it in advance so your mind stays calm.

3. Risk/Reward Ratio

Don’t enter a trade unless the potential profit is greater than the potential loss by at least a 1:2 ratio. This means your strategy stays profitable even if you win less than half of your trades.

4. Don’t double a losing position to reduce the average entry price

“Averaging down in a loss” is one of the most common and destructive mistakes. You don’t correct an error—you double the size of the mistake.

5. Separate trading capital from your core money

Don’t trade with money you need for your life obligations. The psychological pressure it creates alone is enough to ruin the best strategy.

Leverage: a double-edged sword

High leverage doesn’t just increase your profits—it also increases how fast your account gets liquidated. Leverage x20 means that if the price moves only 5% against you, it’s enough to liquidate your entire position. The less experience you have, the lower your leverage must be.