Risk Management for Traders
Position sizing, stop-losses, and portfolio protection strategies.
Risk Management: The Skill That Keeps You in the Game
The best trading strategy is worthless without proper risk management. This hub covers position sizing, stop-loss techniques, portfolio allocation, and the psychological discipline needed to survive inevitable drawdowns.
The 1% Rule
Never risk more than 1-2% of your account on any single trade. This simple rule ensures you survive a string of losses without catastrophic damage to your capital.
Articles
Coinbase vs Kraken for Beginners (2026): Which Crypto Exchange Is Better?
Kraken publishes the trading rates a beginner pays, from the app's flat 1% fee to Kraken Pro's 0.40%/0.80% first tier; Coinbase prices simple trades per order but is the option of the two in New York and Maine, where Kraken does not operate.
tastytrade vs thinkorswim 2026: Which Options Platform Wins?
Choosing between TD Ameritrade and E*TRADE for options? We compare platforms and fees.
How to Start Trading Stocks With $100 in 2026: Fractional Shares, Fees and Rules
With $100 you can buy slices of stocks and ETFs: Fidelity, Schwab and Robinhood take fractional orders from $1, and Fidelity and Schwab state no account minimums. The account, order and fee rules that matter at that size, checked October 2026.
Best Crypto Exchanges in the US (2026): Fees, State Access and Custody Compared
Kraken is the strongest default for most US states on published fees, Gemini covers New York and Maine where Kraken does not, and Binance.US prints the lowest order-book rates but is licensed in 32 states.
Robinhood vs Webull (2026): Which Trading App Is Better for You?
Both apps charge $0 commission on stocks, ETFs and options, so the deciding factors are the IRA match and the subscription behind it, margin terms, desktop tools and Webull's paperTrade practice mode.
Common Questions
What's the minimum amount needed to start trading?
Many online brokers now offer $0 minimums for stock trading. Forex typically requires $100-$500 for micro accounts. Options usually needs $2,000+ for margin accounts.
Stock broker vs forex broker - which do I need?
Stock brokers offer equities, ETFs, and options. Forex brokers specialize in currency pairs with higher leverage. Some like Interactive Brokers offer both. Consider fees, platforms, and asset variety.
What trading fees should I watch out for?
Key fees: commissions per trade, spreads, overnight/swap fees, inactivity fees, withdrawal fees, and data subscriptions. Commission-free doesn't mean free - brokers may earn from payment for order flow.
Is day trading profitable for beginners?
Statistics show 70-90% of day traders lose money. Success requires education, practice, disciplined risk management, and $25,000+ for US pattern day trading rules. Start with swing trading.
Key Terms
Stop-Loss Order
An order that triggers a market sell when a stock drops to a specified price, limiting potential losses. A stop at $45 on a $50 stock means it sells (at market) if the price touches $45. Stop-limit orders add a price floor but risk not executing in a fast decline.
Trailing Stop
A dynamic stop-loss that follows the price upward by a set amount or percentage but doesn't move down. A 5% trailing stop on a stock that rises from $100 to $120 would trigger at $114. Locks in profits while allowing for continued upside.
Margin Call
A broker's demand for additional funds when your account equity falls below the maintenance margin requirement (typically 25-30% of positions). If you can't deposit funds, the broker liquidates your positions at market prices — often at the worst possible time.
Leverage
Using borrowed money to increase position size beyond your cash balance. 2:1 margin means $10K buys $20K of stock. Amplifies both gains and losses. Options provide implicit leverage — a $3 call option can control $100+ of stock. Most retail traders lose money with leverage.
Risk Management
The practice of controlling potential losses through position sizing, stop-losses, diversification, and portfolio allocation. The most important trading skill. Common rule: never risk more than 1-2% of your account on a single trade. Surviving drawdowns is more important than maximizing gains.