Collectible card · Common
Risk & reward
Risk 1% or less per trade, place the stop where the idea is wrong (not where it hurts less) and aim for at least twice what you risk.
Why it works
With 1:2 you can be wrong 60% of the time and still make money. With tiny stops (smaller than the ATR) normal noise takes you out.
How to use it
Measure the ATR: a stop under 1× ATR is usually too tight. Then size the position so that hitting the stop costs your fixed % of the account.
The typical mistake
Moving the stop, closing out of fear or risking 5% to "win it back".
FAQ
What is Risk in trading?
Risk 1% or less per trade, place the stop where the idea is wrong (not where it hurts less) and aim for at least twice what you risk.
How do you trade Risk?
Measure the ATR: a stop under 1× ATR is usually too tight. Then size the position so that hitting the stop costs your fixed % of the account.