【FX】What matters more than methods: the three stages of risk management

Asset management is more important than trading methods

Quoted book

Jack D. Schwager. The New Market Wizards. Parr and Smith Risk management is simple and shown in three steps. A. In every trade, you must not risk more than 1-2% of your capital. (Depending on the approach, a somewhat larger figure might be justifiable. However, I strongly advise not to exceed 5%.) B. Before executing a trade, decide your exit point. This rule is proposed by many traders I interviewed. C. If you lose the initially determined amount (for example 10-20%) take a breather, analyze what went wrong, wait until you feel confident, and prepare a high-probability trade idea before you start trading again.