A risk management guide for beginners: Why this alone will determine whether or not you succeed as a trader. [img:gif-10P7sZeia]

Trading is not just about making profits, it's also about protecting your capital. 90% of people actively lose money in the markets. So simply not losing money already puts you ahead.

Risk management starts with understanding that not all trades will be winners. Losses are part of the game. In fact... you will likely incur lots of losses. Even the best traders in the world average about a 50% win rate. Put it this way -->

The league average for 3-pointers in the NBA is 35% Mind you... This is the league with the best players in the world And they still miss almost 7 out of 10 shots Shooting 40% from deep means you're a good shooter 45% puts you alongside The Splash Brothers (Curry & Thompson) [img:gif-VNtLIceAn]

This means the best basketball players in the world regularly miss over half their 3-point attempts. The same applies to traders. We will miss a lot of shots in our careers. And the only way to make sure you can keep shooting is managing your risk.

As you can see... Risk management has a lot to do with your mindset. It's about accepting that losses are part of trading and focusing on long-term success rather than short-term gains.

Successful traders understand that they can't control the markets. But what they can control is their reaction to the markets. They can control their risk, their emotions, and their decisions. This is the mindset you must cultivate.

The essence of risk management is to keep losses small and to let winners run. And one of the best ways to keep losses small is to use a stop-loss order. But most people use stop-losses wrong.

#1 mistake most people make is not calculating their position size. Position sizing is about deciding how much of your capital to risk on each trade. A common rule of thumb is to risk no more than 1-2% of your trading capital on a single trade. But what does this mean exactly?

For example, if your trading capital is $10,000 and you decide to risk 1% on a trade... Some people think 1% risk means you only open a position worth $100. But that'll only screw you because your position size will be really small.

Other people think 1% risk means a 1% stop loss. But that'll also mess with you. Because every trade is different. No way a 1% stop loss would work for every trade.

Here's how position sizing actually works: If you're risking 1% on a $10k account You should only lose $100 at most if the trade goes against you. It doesn't matter if you have a 0.1% stop loss or a 10% stop loss You should only lose 1% of the account if the trade goes south.

Whatever level trader you are, focus on RM. Understand that losses are part of the game and focus on keeping them small. If you try to avoid losses by: • Adding to losing positions • Not using a stop loss You will simply end up blowing your account by losing one big trade.

Remember, successful trading is not just about making profits, it's also about managing risk. As the old saying goes, 'Take care of your losses and the profits will take care of themselves.' [img:gif-IiMvkChqW]

If you'd like to potentially work with me. I help traders make a full-time living through just trading within the next 12 weeks. We will accomplish this by getting you funded for up to $100k. If that sounds like something you might be interested in... DM me "mastermind"

Also... I am launching a free course soon. And I know... Most free courses suck absolute horseshit. This will be different. I will actually change the way you trade. Sign up to the waitlist if you're interested: theartofcrypto.co/join-skool-aoc