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Risk Management Guide

Risk Management Guide

Core rules for protecting your trading capital.

Core rules

Risk a small, fixed percentage per trade (many educators suggest 1–2% or less).
Always use a stop-loss and size positions from it.
Set a maximum daily and weekly loss, and stop trading when you hit it.
Watch correlation: several USD trades can be one large bet.
Reduce size around high-impact news.
Never trade borrowed money or money you need for living costs.

Recovery maths

A 10% loss needs about 11% to recover; 25% needs 33%; 50% needs 100%. Avoiding large drawdowns matters more than chasing large gains.

Learn more in Module 6: Risk Management.

ForexEducation1 · forexeducation1.com · Educational content, not financial advice. Trading involves a high risk of loss.