Risk Management Every Funded Trader Must Know

Risk management is the difference between a funded trader who lasts and one who blows their account in week one.

Position Sizing

Calculate position size based on your stop loss distance and risk percentage. Use: Lot Size = (Balance x Risk%) divided by (Stop Loss pips x Pip Value).

Daily Loss Limits

Set a personal daily loss limit below the challenge limit. If the challenge allows 5%, stop at 3%. This buffer protects you from edge cases.

The 1% Rule

Risk no more than 1% of total account per trade. Without this rule, one bad trade can end everything.

Correlation Risk

XAUUSD and USDJPY often move together during risk-off events. Treat correlated pairs as one position.