Doing your best to risk no more than 1% of total trading capital  per trade, should solve these five problems that traders face:

  1. If you only risk 1% of trading capital per trade, you will not experience more than a 10% draw down with 10 consecutive losses. If your trading system is robust, you are unlikely to lose more than 10 times in a row.
  2. Your stress level will be manageable if each trade is just one of the next 100, with 1% of capital at risk.
  3. Your ego will be manageable if a loss is just 1% of your capital. It will turn decrease your desire to be right at all costs.
  4. You will be more likely to remain emotionless about your trades, when trades are 1% of trading capital with the correct position sizing and stop loss.
  5. With only 1% of trading capital at risk, you will become a better time manager because you will not need to watch ever tick of your position.


By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.