🔗 Pro traders don’t aim to win every trade — they aim to never lose everything.
🧠 What is Risk Management?
Risk Management is a set of rules and techniques that protect your capital from being wiped out.
It answers:
How much should I invest per trade?
Where should I place stop-loss?
How do I survive a losing streak?
💡 Rule #1 of trading: Don’t lose money. Rule #2: Never forget Rule #1. – Warren Buffett
⚖️ Why Most Traders Lose
❌ They risk too much on one trade
❌ They use high leverage without stop-loss
❌ They chase losses emotionally
❌ They don’t have a fixed % risk per trade
✅ Pro traders survive because they control losses
Even if they lose 4 out of 10 trades — they stay profitable.
📉 How Much Should You Risk per Trade?
🎯 Golden Rule: Risk only 1% to 2% of your total capital on a single trade.
Let’s say your capital is ₹10,000:
Max risk = ₹100 to ₹200 per trade
This is not your trade amount — this is your possible loss
🧮 How to Calculate Position Size
Let’s break it step-by-step:
Capital = ₹10,000
Risk per trade = 2% → ₹200
Stop-loss = ₹10 below your entry price
➡️ Position size = Risk ÷ Stop Loss
= ₹200 ÷ ₹10 = 20 coins
That’s your trade size. This ensures:
If stop-loss hits, you lose only ₹200
You can keep trading confidently, without fear
🛑 Stop-Loss & Take-Profit – Your Lifeline
🔴 Stop-Loss:
A pre-decided price where you exit the trade if it goes wrong
Protects from huge losses
🟢 Take-Profit:
A target level where you exit with profit
Avoids greed and locks gains
🚀 Winning trades = average profits bigger than average losses
This is called Risk-Reward Ratio
⚖️ Risk-Reward Ratio (RRR)
Ideal RRR = 1:2 or higher
(Make ₹2 for every ₹1 you risk)
Example:
Risk: ₹100
Target: ₹200
Win 4/10 trades → still profitable
This is the math behind smart trading.
🧱 Use Binance Tools for Safer Trading
Binance lets you:
Set stop-loss and take-profit when placing the order
Use isolated margin to limit losses
Use position size calculator (on Binance Futures)
💡 Don’t just hope for profits — protect your capital like a pro.
⚠️ Common Risk Management Mistakes
❌ Trading without stop-loss
❌ Using entire capital in one trade
❌ Increasing size after losses
❌ Averaging down in a losing trade
✅ Instead:
Follow fixed % risk
Use RRR-based targets
Trade only setups you understand
Accept losses as part of the game
🧘 Pro Trader Mindset on Risk
Weak TraderPro Trader“I’ll double my money fast”“I’ll protect my capital first”“Let’s go all in”“Let’s go small and grow slow”“I can’t afford to lose”“Losses are normal”“One trade to win it all”“Many small wins compound over time”
🧪 Real Example
You buy $ETH at ₹2,60,000
Stop-loss = ₹2,55,000
Risk = ₹5,000
You set target = ₹2,70,000 (profit ₹10,000)
If price hits SL → loss ₹5,000
If price hits target → gain ₹10,000
RRR = 1:2 ✅
Trade is worth taking.
🧠 Summary – Key Takeaways
Risk per trade = 1–2% of capital
Always use stop-loss and take-profit
Focus on RRR > 1:2
No revenge trading
You win the game by not losing your chips
🔔 Coming Next:
📘 Chapter 7: How to Trade Futures Safely – Multiply Profits, Not Risks
We’ll enter the powerful world of Binance Futures, but with full safety mechanisms in place.
📣 Follow Me to Stay Profitable
You’ve learned: ✅ Candlesticks
✅ S/R levels
✅ Indicators
✅ Psychology
✅ And now, risk control
The next step: Scale your game safely.
I’ll guide you on how to use leverage, margin, and advanced tools like a pro.
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