Risk Management
Risk management is the practice of protecting your capital through position sizing, stop losses, diversification, and emotional discipline. It's about surviving bad trades so you can profit from good ones.
Understanding the Concept
Trading without risk management is like driving without seatbelts. You might be fine for a while, but one bad crash ends everything. The best traders in the world aren't right all the time—they just lose small and win big. That's risk management. You need hard rules: max risk per trade (1-2%), max total portfolio risk (5-10%), stop losses on every trade, no exceptions. The market doesn't care about your feelings or your bills. It'll take everything if you let it. Risk management is your defense against your own worst enemy: yourself. When you're up big, it stops you from giving it all back. When you're down, it prevents catastrophic losses.
Real-World Example
You follow a 1% risk rule with $50,000. Even if you lose 10 trades straight, you're down $5,000, not $50,000. You're still in the game. Your neighbor who YOLO'd $25,000 into one trade is done.
How Strykr Helps
Strykr's AI assistant helps you understand and apply Risk Management concepts to your trading. Get personalized guidance and real-time market analysis to make better decisions.
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