Define the maximum loss before entry
Set the stop level from the strategy’s invalidation point, not from the amount you hope to make. Calculate position size only after the stop distance is known. Stops may slip or execute at a worse price during fast markets.
Include every trading cost
Spread, commission, swap or funding, slippage and conversion fees can turn a seemingly profitable setup into a losing one. Use realistic assumptions in testing and compare the same account type and market conditions.
Set a drawdown pause rule
Choose a pre-defined daily and overall loss limit that fits your circumstances. If reached, stop, preserve records and review execution rather than immediately increasing size to recover losses.
Review process, not only profit
Record the setup, entry reason, planned risk, exit, costs and whether rules were followed. Evaluate a meaningful sample of trades; a short winning streak does not establish an edge.
Risk checklist before every trade
Can I explain the setup and invalidation? Is the size calculated from the stop? Are costs and event risk considered? Is the loss affordable? Is there a written exit plan? If not, skip the trade.
Educational information only. This is not individualized investment, legal or tax advice. Trading leveraged products can cause substantial losses. Verify current terms with official sources.