Best Risk Management Strategy For Trading… 1% Risk Rule.

Best risk management strategy for trading is one percent rule that limits your loss to minimum amount. Having a risk management …


    0:00 Intro
    0:44 3 Things to know to become a Successful Trader
    2:05 Plan The Trade, and Trade The Plan
    2:08 SL and TP orders
    2:41 1% Rule
    Risk Management Strategy
    3:07 Example of 1% Rule
    4:01 1% Rule Does Not Mean Minimizing Your Order Size
    4:20 Detail Example

    6:36 Risk-Reward Ratio
    7:20 Example Winning Rate 50% and Risk-Reward Ratio 1:1.5

    Lower the Winning Rate you need more Risk-Reward Ratio to be profitable in the long run.
    8:02 Example Winning Rate 30% and Risk-Reward Ratio 1:3

    8:23 Choose the minimum ratio of Risk-Reward based on your winning rate.

    8:45 Risk-Reward Ratio of at least 1:1.5
    Example Recap when not to Enter or Not to Enter

    9:57 1% Rule and Leverage Example
    11:04 Pay attention to slippage
    11:24 The larger the account, The less risk is usually used.

  2. Professor, would you please do a part 2 video for Risk Management with Margin? I can't find one on YouTube and I believe that would set you apart.

    So if you have a $10,000.00 cash account and 1% rule allowing you to lose $100.00, that's good and very well explained…

    But with that same amount, your broker gives you 4x margin loan so you now have $40K in capital to trade.

    -is the same 1% rule applied?

    -is the same "shares per trade calculation" applied (1% divided by Stop Loss and Stock Price difference)

    – is the same R:R rules applied (1:1.5, 1:2 etc.)

    This is the best explained video of Risk Management out there but i have not found one that incorporates margin (cause we need margin to truly be profitable)

  3. I never knew professional traders had such a low risk level and small profits. This explains why if a $50 stock moves up $1 to $2, you see a big red candle. I'm like, why are they selling so soon?? Lol

  4. Great Video. Thank You!!! I've had 10 people try to explain this to me and every one of them made it sound like the 1% or 2% of the account was the investment which never made sense to me. You're the 1st person to explain that the 1% means only risk a 1% TOTAL LOSS of your investment. GREAT JOB!!! Thanks Again…

  5. Thanks for the explnations, actually I got everything until 7:23, but then after that point things got a bit complex for me. Especially when you said ´in the long run, your account will be in 25 dollars profit,´ when you explained 50 percent winning rate and 1:1,5 risk to reward ratio.

  6. But is you buy half a bitcoin for 20,000 and you only want to use 1% of your account of 10,0000 then you can only use 100. So you will need to use leverage of 20x ? This extremely high level of leverage can get you liquidated faster and so is more risk, then you using more of your account. Leverage above 5x is a lot of risk.

  7. so with 1% risk target, do you open only one position and keep rest in cash? Or do you open muiltple positions each with 1% risk?

  8. Hi Soheil, it's very interesting and useful contents. But I have a question though. With following entry parameters: Balance 4000 $, Risk 1% (max 40 $), entry price 30.4 $, stop loss price 30.0 $. Your calculator gives result: buy 100 units, meaning 3040 $.
    When I enter the trade on Kucoin, I would enter "buy 100 units at 30.4 $" which blocks 3040 $ of my budget. So I have lack of funds to enter the stop loss trade "sell 100 units at 30.0 $" because I only have 960 $ left of my budget. How can I deal with that?

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