Trading it · Lesson 18 of 20
Risk, stop-loss and journal
A good setup with bad risk management still loses money. Fix your risk per trade, make every trade worth at least twice what it risks, and keep a journal.
Why risk : reward matters
With a 1:3 reward-to-risk ratio you only need to win about one trade in four to break even. Ten trades with 3 wins and 7 losses: 3 × 3R − 7 × 1R = +2R. A short sniper stop is what makes 1:3 and more realistic.
Lot size calculator
Money at risk: $10.000.04 lotsAt 1:3 the target is worth $30.00
Gold: 1 standard lot = 100 oz, so a $1 move = $100 per lot. USD-quote forex: 1 standard lot = $10 per pip. Check your broker's contract size.
Rules
- Risk the same small percentage on every trade (many traders use 0.5–1%).
- Decide the stop first, then calculate the lot size. Never the other way round.
- Aim for at least 1:2 to the next liquidity. Skip the trade if the target is too close.
- Journal every trade: screenshot before and after, setup type, timeframe, session, result.
- Review the journal every week and look for the setups that actually work for you.
Practise each lesson with TradingView Bar Replay and a demo account until your journal shows the setup working over at least 30 trades.
Check yourself
1. 10 trades at 1:3 RR, 3 winners and 7 losers. What is the result?
2. What comes first?