Risk and Money Management
Four classes on staying in the game: how much to risk on a trade, how to size a position from its stop, where stops and targets go on the ladder, and a written trading plan.
Most trading accounts are not lost by bad entries. They are lost by positions that were too large for the stop, losses that were allowed to grow, and rules that were changed in the middle of a losing streak. This course is about the part of trading you control completely: how much you risk.
Each class works the same way:
- Read the class and redo each worked example with your own account size.
- Tick I’ve read the class.
- Check yourself with the short quiz. You need 70% to pass, you can retake it as often as you like, and your best score counts.
It helps to have finished Forex Essentials first, which explains pip value and margin. When you finish here, Outer Box Foundations teaches the method that tells you where the levels are.
This course explains risk management. It is not financial advice, and the percentages in it are examples, not recommendations for your account. Trading carries a high risk of loss.
This course is free to read. Sign in to tick off each class, take the quizzes and earn the certificate.
Units
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1
How Much to Risk on One TradeHow much to risk on one trade, what a losing streak does at different sizes, and why getting back from a loss is harder than falling into it.
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2
Sizing a Position from Its StopOne formula that turns your risk and your stop into the right trade size, with worked examples and what to do when a trade is simply too big.
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3
Stops, Targets and Expectancy on the LadderWhere stops and targets go on the ladder, measuring trades in R, how often you need to win to break even, and what a set of rules earns on average.
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4
Your Written Trading PlanRules you write down while calm: size by how well the boxes agree, limits on total and daily risk, news and weekends, and a one-page plan.