How to Manage Risk When Trading

Managing risk when trading means never risking so much on one trade that a few losses could wipe you out. A common rule is to risk 1–2% of your account per trade so you can survive a run of losers.

Always use a stop loss so you know your maximum loss before you enter. Don't move the stop further away when you're wrong—accept the loss and move on. Good risk management is what keeps you in the game long enough to improve.