Risk rule
Never risk more than your max risk per trade
A trade is only valid if its risk stays inside the max risk defined in your Trading System.
RiskBlocking
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Money management basics
Objective
Connect capital, accepted risk, targets and position size inside one coherent framework.
To study+
2
+Learning card
Money management basics
Objective
Connect capital, accepted risk, targets and position size inside one coherent framework.
To study
Displayed content ยท Essential
Definition
Capital is the resource that keeps you in the game. Managing it comes before trying to win fast.
Base example
If a trader risks 10% per trade, a short losing streak can destroy the account. With controlled risk, the trader has time to review and improve.
Book-to-practice bridge
From concept to practice
Money management connects a capital base, a loss tolerance, per-trade risk, exit geometry and a tracking method. One isolated rule is not enough: the whole framework must remain coherent through multiple positions, losses and market regimes.
From the book
Chapter IV builds the reasoning in this order: define metrics, estimate portfolio risk, translate it into per-trade risk, position exits, calculate size, then track positions in a journal.
Rulyx extension
Rulyx turns this chain into saved rules, pre-trade checks, open risk, execution events and review metrics. It does not choose thresholds for the user.
Teaching diagram
Losing streak and review point
Trade 1
-1R
Trade 2
-2R
Trade 3
-3R
Trade 4
-4R
Trade 5
-5R
Trade 6
-6R
!
The streak reaches the system reference: pause automatic action and review the facts before the next decision.
Fictitious example. The streak illustrates cumulative risk; the review point is a Rulyx rule, not a universal threshold.
Assumptions to check
The capital base, risk unit, point value, fees and definition of a loss must remain stable. A historical probability is usable only when the sample and setup are comparable.
Edge case
A losing streak can be amplified by correlated positions, a gap or a change in size. Simply multiplying risk per trade by the number of losses then becomes an approximation.
Numerical example
With a 10% portfolio tolerance and a reference streak of 13 losses, 10 / 13 is about 0.77% per trade. The book rounds its case to 0.8%; this belongs to its assumptions, not to a universal rule.
Common mistakes
Copying a standard percentage, changing risk after one result, confusing capital committed with capital actually at risk, or forgetting fees and existing open positions.
Application in Rulyx
Set limits in My Trading System, calculate size in Position Builder, check the trade, then compare the plan with Journal events and Coach analyses.
Direct support in the book
Chapitre IV - Money management, pages 56 to 76
This card paraphrases an identified passage from the book. Open the listed page to read the exact text in context.
Open the book passageAction in Rulyx
Academy to Trading System
Turn lessons into personal rules.
Academy to Trading System
Turn lessons into personal rules.
Add useful learning points directly to the system Rulyx will use to evaluate your trades.
RR rule
Only take trades with RR above your minimum RR
A setup must respect the minimum reward/risk ratio configured in your Trading System.
RiskBlocking
Discipline rule
Respect the plan before validation
The setup, risk and execution rules should match the Trading System.
ExecutionBlocking
Review rule
Review every closed trade
Every closed trade should produce a lesson, even when the result is positive.
ReviewWarning