Why Risk Management Matters
In leveraged trading, risk management isn't optional — it's the difference between long-term success and account liquidation. The most successful traders aren't those who make the biggest gains, but those who survive the longest.
Position Sizing
The single most important risk management technique is proper position sizing. Never risk more than 1-2% of your total portfolio on any single trade.
The Kelly Criterion
For more advanced traders, the Kelly Criterion provides a mathematical framework for optimal position sizing based on your win rate and average win/loss ratio.
