If I stuck to this one rule the day I started trading I would have...
• Saved $1,000's of dollars in losses.
• Sped up my learning process.
• Avoided every major account drawdown I've had.
If you're new to trading, make sure you stick to this 👇🏼
The 1% Rule 🧵
The 1% Rule states that you should risk, at most, 1% of your total account on every individual trade.
This 1% risk is a function of two flexible components:
• Your Position Size: % of your account in the trade
• Your Trade Risk: % between your entry price and your stop loss
Want to take a larger position size? Make your stop tighter.
Trading a volatile stock? Size down on the trade.
The most important aspect of trading is risk management.
It's great to make money, but worthless if you don't have a system to keep it.
Over 50% of my trades are losses, but I'm still profitable because of the 1% Rule.
Keep losses small & let winners run!
"Nick, 1% risk isn't enough, my account is small."
New traders are EXACTLY who benefits the most!
By limiting each trade's potential losses to 1% it will take you:
• 29 straight losses to fall 25%
• 69 straight losses to fall 50%
It's tough to be that consistently bad 😅
