Free course · Risk Management · Beginner
Nobody Rebuilds From Zero: Risk Rules That Protect Trading Capital
A free trading risk management course for people who choose entries with care and then size them by feel. The rules are short, the arithmetic is simple, and all of it gets written down before the market opens.
Who it is for
Traders who pick entries carefully but size positions by feel, and want written rules for how much to risk and when to cut back.
By the end you can
- Turn a risk percentage into a dollar budget and a share count for any trade
- Place a stop at the price where the trade idea is wrong and size the position around it
- Calculate the recovery gain after any drawdown and what a losing streak costs
- Write a risk plan on a single page, with limits set before the trading day starts
The lessons
- I Risk Per Trade: Turning a Percentage Into Dollars and Shares
Risk per trade in dollars: turn a percentage of the account into a loss budget, divide by the stop distance for shares, and pad it for costs and slippage.
About 12 minutes, with a quiz at the end
- II Placing a Stop Where the Trade Idea Is Wrong
Where to place a stop loss: below the structure the trade depends on, adjusted for volatility with average true range, then sized to your dollar risk budget.
About 13 minutes, with a quiz at the end
- III Drawdown Limits and the Arithmetic of Getting Back to Even
Drawdown recovery math: the gain needed to get back to even after any loss, what a losing streak costs at 1% and 3% a trade, and drawdown steps set in advance.
About 12 minutes, with a quiz at the end
- IV Writing a One-Page Risk Plan You Can Follow on a Bad Day
How to write a trading risk plan on one page: risk per trade, total open risk, a daily loss limit, drawdown steps, a leverage cap and rules for earnings days.
About 11 minutes, with a quiz at the end
Entries get practiced. Traders study setups, mark levels and wait for the right candle, and then decide how many shares to buy in about the time it takes to type a number into the order ticket. The size is often the least considered decision on the screen, and it’s the one that decides whether a bad month is an inconvenience or the end of the account.
Who it suits
It suits anyone who trades their own account and has never put in writing how much a single losing trade is allowed to cost, whether the account is large or small and whether the trades last an afternoon or a few weeks. You may already pick good spots. No statistics background is needed. What’s missing is a rule for size and a rule for when to shrink it, written down where you can check them on a day when every instinct says to ignore both.
What to have ready
Have a calculator and your current account balance. If you keep a journal, pull your last twenty trades. Entry, stop, exit and share count are enough.
The journal is optional. It makes the lessons personal, because every formula can be run on trades you have already taken, and the gap between what you risked and what a fixed rule would have risked is often the most telling figure in the whole journal.
How to work through it
Take the lessons in order. They start by turning a percentage of the account into dollars and shares, move the stop from wherever feels comfortable to where the trade idea is proven wrong, work through the arithmetic of losing streaks and recovery, and finish by gathering every rule onto a single page you can keep beside the screen.
Each lesson finishes with a short quiz. Treat a wrong answer as a pointer back to the section that covers it.
What it leaves out
Statistics of trading systems are out. Expectancy, backtesting and the question of whether an edge is real need more room than a course on basic rules can give, and they make more sense once the risk rules are already in place. Options risk models are out too. The same dollar rules work on an options position. The Greeks and the pricing behind them are a separate subject.
Where to go after
The position size calculator runs the share-count formula for any account, risk and stop, and for the argument against sizing up on the trades you feel best about, read conviction makes a terrible position size. The maximum drawdown entry explains how the worst fall from a peak is measured. The loss recovery calculator shows the gain each drawdown needs. To test a written plan, try poke a hole in the plan.
The companion course on margin accounts, interest and margin calls covers the loan side, from the agreement you sign to the price at which the broker starts selling your shares.
Readers also ask
What percentage of an account should you risk per trade?
There is no rule that fits every account. Many traders work with a small fixed fraction, such as 0.5% or 1% of the current balance, because it keeps any single loss small enough to recover from. The lessons show how to turn whatever fraction you choose into dollars and shares.
Do these risk rules apply to prop firm accounts?
The arithmetic does. A prop firm account adds its own limits, usually a daily loss cap and a maximum drawdown written into the firm's rules, and those limits sit on top of your plan. Read the firm's rule page and set your own limits inside theirs.