Common risk management strategies

There is no single way to approach risk management. Investors and traders often use a combination of risk management tools and strategies to increase their chances of growing their portfolios. Below are a few examples of strategies that traders use to mitigate risks.

👉1% trading rule
The 1% trading rule (or 1% risk rule) is a method traders use to limit their losses to a maximum of 1% of their trading capital per trade. This means they can either trade with 1% of their portfolio per trade or with a bigger order with a stop-loss equal to 1% of their portfolio value. The 1% trading rule is commonly used by day traders but can also be adopted by swing traders.

While 1% is a general rule of thumb, some traders adjust this value according to other factors, such as account size and individual risk appetite. For instance, someone with a larger account and conservative risk appetite may choose to restrict their risk per trade to an even smaller percentage.

Learn Crypto✅…