The difference between a professional trader and a gambler is not luck… but risk management.

You may read the market correctly, have a perfect entry point, but if you ignore this principle, your account can still 'disappear' after just a few trades.

Today, I will share the survival formula to protect capital and avoid liquidation — no matter how volatile the market is. 🚀

1. Understand Risk - Reward Ratio (RRR)

RRR tells you: How much you are willing to risk to earn how much.

  • 1:2 → Risk $200 to earn $400.

  • 1:5 → Risk $200 to earn $1,000.

The higher the RRR → the less you need to win many times to still profit.

2. Only risk 1-2% of capital for each trade

Never go 'all-in'.

For example: Account $10,000 → risk 2% = $200/trade.

Even if you lose 5 consecutive trades, you only lose 10% of your account — still enough to get back in the game.

3. Stop-loss is the 'survival shield'

No stop-loss = opening the door for liquidation.

  • Set stop-loss at the point where the trading plan is invalidated, not at the level where you 'feel safe'.

  • Absolutely do not pull stop-loss further away hoping the price will turn around.

4. Profits must be greater than losses

A winning trade with RRR 1:5 → +10% capital (if risking 2%).

→ One winning trade is enough to cover 5 losing trades.

This is why professional traders do not need to win 90% of trades to still be profitable.

5. Accumulate profits, lock in losses

Limit small losses, let profits run → accounts naturally expand.

  • Lose 5 consecutive trades (risking 2%): -10% capital.

  • Win a few trades RRR 1:4 or 1:5: +40% to +50% capital.

You survived the red day and exploded on the green day.

Conclusion:

You do not need to catch every wave. You do not need to win every trade.

You only need: Discipline – Stop-loss – Clear RRR strategy.

If you do this, liquidation will never appear in your trading history. 💪📈