Risk & Money Management

A per trade limit caps a single case and nothing else. The three levels you need, how to derive the numbers downward from the week, and why the consequence must be written down first.

Leverage sets the margin you tie up, not the loss when your stop triggers. What it genuinely changes, when it does become a risk, and the four journal fields it requires.

Five positions on one theme behave like a single one on a bad day. How to measure total open risk, group positions coarsely, and work with two limits instead of a per trade rule.

A normal drawdown follows from your win rate and risk per trade, not from a general percentage. How to calculate your expected losing streak and spot the three signals of a genuine strategy problem.

A stop belongs where your idea is invalidated, and position size follows from it. Five common mistakes, three workable methods, and the two journal metrics that reveal your stop quality.

An R multiple measures every trade in units of the risk you took. The formula, a worked example, how to read an R distribution, and the four errors that make the review systematically too optimistic.

Position size decides what a single loss actually costs you. Here is how to calculate it in three steps.