Risk only a small amount per trade
Many cautious beginners use a small fixed percentage of account balance as the maximum loss per trade. The exact number is personal, but the idea is simple: one trade should never decide the future of the account.
Place the stop before the entry
A stop loss marks the price where your trade idea is no longer valid. If you choose the lot size first and think about the stop later, you may discover that the trade is larger than your account can handle.
Set a daily and weekly limit
A daily loss limit helps stop emotional trading. A weekly limit gives you space to review your process instead of trying to recover every loss immediately.
Key takeaways
- Know the possible loss before entry.
- Use stops based on the trade idea, not hope.
- Stopping for the day is a trading skill.