Risk
Risk management
The discipline of losing small so you survive to trade the good setups.
Risk management is the set of rules that cap what any trade, day or month can cost: a fixed fraction of equity per trade, a maximum total heat, a daily loss limit and a drawdown level that reduces size or stops trading.
It is the highest-value skill in trading because it is the only one that is fully within your control. Direction is uncertain on every trade; the amount at stake never is.
Taught in these lessons
- Lots & leverage — Forex Foundations
- Risk management basics — Forex Foundations
- How to choose a broker — Forex Foundations
- Order types in practice — Charts & Execution
- Sessions & liquidity — Charts & Execution
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