The sixth commandment of profitable trading is to reduce your risk. If you think you should be risking this much, you probably should be risking that much. The ideal amount to risk on a trade is usually far less than you think because unforeseen events happen. Crazy things happen in the stock market. Markets crash and stocks have bad announcements and earnings, and sometimes there are bankruptcies and all sorts of things. Therefore, you’ve got to trade with very low risks so that none of those crazy things helps you survive, stay in the game, and make long-term money. Thus, reduce your risk even less than you think it should be.
Search
Trade With Confidence, Not Guesswork
Learn proven systems that help traders like you make smarter, more confident decisions.
POPULAR POSTS
- Trading Systems
- Trading Strategy
- Backtesting
- Automated Trading Systems
- Position Sizing
- Drawdown in Trading
- Stop Loss
- Risk Management for Traders
- Slippage in Trading
- Shorting a Stock
- Trend Trading / Trend Following
- Mean Reversion
- Swing Trading
- Technical Analysis
- Trading Indicators
- Relative Strength Index
- Bollinger Bands
- Average True Range
- Moving Averages
- Trading Software
- RealTest
- Amibroker
- Trading Plans
- Order Types
- Trading Calculators
- Trading Books
- Trading Mistakes
- Trading Goals
- Trading Psychology
- Learn Stock Trading
- Candlesticks Patterns
Recent Posts
- Gold and Interest Rates: The Intermarket Signal That Halved Gold’s Drawdown
- Richard Dennis and the Turtle Traders Experiment
- Ed Seykota: Lessons From a Trend Following Pioneer
- Types of Traders Explained: Which One Are You?
- Mean Reversion vs Trend Following: Which Fits You?
- Position Trading: The Complete Guide for Stock Traders
- How to Backtest a Trading Strategy: Step-by-Step
- Stock Trading Courses in Australia: How to Choose
- Jim Simons: Lessons From a Systematic Trading Legend
- Risk Of Ruin Calculator | Free Monte Carlo Tool For Traders
- Risk Of Ruin In Trading: Why The 2% Rule Fails
- Trading Psychology Books: 9 Worth Reading (And 1 Warning)
- The Hedge Fund Graveyard: 62 Blow-Ups in 20 Years and What They Teach You
- Sharpe Ratio Explained: What It Tells a Systematic Trader (and 4 Things It Hides)
- What Is a Trading Edge? A Systematic Trader’s Complete Guide
- Portfolio Construction for Traders: How to Build a Portfolio of Trading Systems
- I Tested the Buy the Dip Strategy for 36 Years – Here is what happened
- Introducing Brokers: What They Are and Why They Could Be Costing You a Fortune
- Automated Trading Systems: The Complete Guide for Systematic Traders (2026)
- Set Your Trading Goals First (Then Design Everything To Deliver Them)

