The Truth
95% of traders blow up in 6 months.
Not from bad analysis. From risking too much.
The 2% Rule
Never risk more than 2% of your account per trade.
$5,000 account → Risk $100 per trade
$1,000 account → Risk $20 per trade
Simple. Boring. Life-saving.
Why It Works
Risk 2%:
10 losses = Down 18%
Can recover ✅
Risk 20%:
3 losses = Down 49%
Need 96% gain to recover
Nearly impossible ❌
Real Numbers
Trader A (2% risk):
5 losses = -$1,000
Balance: $9,000 ✅
Trader B (20% risk):
5 losses = -$6,723
Balance: $3,277 ❌
Same losses. Different survival.
How to Calculate
Formula: (Account × 2%) ÷ Stop Distance = Position Size
Example:
Account: $5,000 (2% = $100)
Entry: $76,000 BTC
Stop: $74,500 ($1,500 away)
Position: 0.0667 BTC
Loss if stopped: Exactly $100
Killing Excuses
"2% is too small!"
No. With 1:2 risk/reward:
Risk 2% → Make 4%
10 wins = 40% growth
"I need big wins!"
You need to NOT GO BROKE first.
"Influencers use 10x!"
They hide the 20 liquidations.
The Death Spiral
Following 2% rule:
3 losses = -$294
Breaking the rule:
Loss 1 (2%) = -$100
Loss 2 (10%, revenge trade) = -$500
Loss 3 (20%, panic) = -$1,000
Total: -$1,600
Rule-breaking multiplied losses by 5.4x.
Enforce It
Before EVERY trade, write:
Account: $_____
2% risk: $_____
Entry: $_____
Stop: $_____
Position: _____
Use online position calculators. Takes 30 seconds.
Advanced (Later)
Once profitable:
High conviction: 3%
Normal: 2%
Low conviction: 1%
Never exceed 3%.
The Stats
2-3% risk traders:
73% alive after 1 year ✅
"Wing it" traders:
7% alive after 1 year ❌
Action Now
Calculate: Account × 0.02
Write on sticky note
Stick to monitor
Never exceed it
Example: $3,000 account → "MAX RISK = $60"
Bottom Line
You don't have an analysis problem.
You have a risk management problem.
The 2% rule won't make you rich overnight.
It keeps you alive long enough TO get rich.
Professional traders: Protect capital first. Amateur traders: Chase profits, lose everything.
Your choice: Get rich slow, or go broke fast.
The math doesn't lie:
Small risks = Survival
Big risks = Destruction
Use the 2% rule. Every single trade.
