Day 5 · Learning path
Risk management
The real edge is not hitting one trade. It is surviving long enough to compound good decisions.
🎯 Main risks
- Concentration risk: one market becomes too large relative to total capital.
- Liquidity risk: you want to exit, but depth is poor.
- Resolution risk: your interpretation of the rules is wrong.
- Information advantage risk: some markets may not be fair if others possess better information.
🧠 Practical controls
- Start with small sizing, often 1% to 5% of total capital per trade.
- Reduce frequency in noisy or low-clarity markets.
- Avoid large positions in markets with ambiguous rules.
- Review the biggest loss source every week.
Survival rule: staying in the game matters more than any single trade outcome.
✅ Today's task
- Define your maximum size per trade.
- Define a daily max loss threshold.
- Write down 3 market traits that automatically disqualify a trade.