Hey folks, this is one of the most important articles I’ve ever written. We’re going to delve into everything about position sizing, trading volume, lots—ultimately, we’re talking about risk management in day trading, swing trading, and position trading.

This video serves traders in forex, stocks, futures, cryptocurrencies, regardless of the timeframe you trade. This text is for you.

How much money should you enter with?

I’ll explain all the math behind position sizing—how much money you’ll enter the trade with, how much you’re willing to risk losing if the trade goes wrong, and how to factor in profits from the previous trade in the calculation for the next trade.

How do we decide these things as simply as possible, without using a calculator or anything? This is trader accounting; there’s not much about it on the internet, so I hope it adds value to you. Now, enough talk, let’s get into the lesson.

I’ll give examples here on this xStation 5 platform, but it’s not a brokerage recommendation. You have to find one that suits you and the country you live in. Shoutout to subscribers from Africa; we’re getting quite a few. And from time to time, I’ll use the blackboard in this lesson, old-school style like in the channel’s old videos—keeping it authentic.

Strategy, Management, and Behavioral

I’ll open the EUR/USD, the most traded currency pair in the world, and I’ll explain everything you need to know to manage your account to survive in the market before thinking about making a profit. The first goal is to survive—to not blow up your trading account, to not lose all your money.

There are three essential components for us to trade in any market: Strategy, Management, and Behavioral. Today, we’re talking about Management, so I’ll leave links in the description for you to check out strategy and behavioral lessons later.

Let’s say you have a $1000 account. Or 1000 reais, 1000 pounds—doesn’t matter. I want you to understand the math behind it, so you can apply it to your trading account.