THE INEVITABLE SMALL RISKS

There is a very high chance that every trader would have heard of the basic rule:

"Never risk more than 2 percent of your capital on a single trade".

Straight forward, this means if you have a $100 trading account, you should not risk more than $2 on a single trade. In other words, you should never lose more than $2 in a single trade.

This is a beautiful rule because it will take 50 consecutive losing trades to blow your $100 account, which in itself is a rare possibility. This rule also keeps us long enough in the market to make mistakes, learn, improve, and make new mistakes.

As simple as the rule sounds, most beginners seldom follow it, mostly while doing discretionary trading, because of the strict discipline needed to adhere to this rule.