Risk and money
Position size, stops, expectancy and drawdown — the things that decide an account's fate more than the quality of entries.
6 lessons · 36 min
Who this course is for
For everyone, including those already trading. If you cannot say in dollars what you are risking in the position open right now, this course matters more than any method of analysis. After it you size positions from risk rather than from leverage, and you know in advance what drawdown your own rules allow.
- 1Position size: computed from risk, not from leverage6 minThe only question to answer before entering: how many dollars do I lose if I am wrong. Everything else follows from it.
- 2The stop belongs where your idea breaks6 minA stop is not "how much I agree to lose". It is the price at which your reason for entering stopped existing. Everything else is guessing.
- 3R and expectancy: why your win rate means nothing6 min"I am right 70% of the time" says nothing at all. Profitability is set not by the share of wins but by the product of two numbers.
- 4Losing streaks: seven in a row is normal, not broken7 minA profitable system necessarily goes through long losing runs. Whoever does not know this in advance abandons it at exactly the wrong moment.
- 5Five altcoin longs are one trade, not five5 minYou carefully risk 1% in each position. You open five and believe you are risking 5%. In reality, if they move together, you are risking nearly 5% in ONE trade.
- 6When to change size: rules instead of feelings6 minPosition size changes by a rule written in advance, not by mood. The difference between those two is the whole difference between having a system and not having one.