Best Practices & Risk Management
Professional habits for preserving capital and consistent growth.
Position Sizing
| Risk Level | Per-Trade Risk | Max Concurrent Risk |
|---|---|---|
| Conservative | 0.5–1% | 3% |
| Moderate | 1–2% | 5% |
| Aggressive | 2–3% | 6% |
Formula:
Position Size = Risk Amount / (Stop Loss Pips × Pip Value)
Example: $100K account, 1% risk ($1,000), 80 pip stop, $10/pip
→ Position = $1,000 / (80 × $10) = 1.25 lots
Correlation Risk
Watch out for hidden exposure when holding multiple similar positions:
| Positions | Actual Risk |
|---|---|
| Long AUD/JPY, NZD/JPY, CAD/JPY (each 1%) | ~3% correlated risk if Risk-Off event |
Use Market Sentiment to understand when positions are correlated.
Three-Timeframe Approach
| Timeframe | Purpose |
|---|---|
| Weekly | Fundamental direction (Scoreboard, Intrinsic, Sentiment) |
| Daily | Trend context and major S/R levels |
| 4H | Entry timing and stop placement |
Rule: Fundamentals = what to trade. Technicals = when to enter.
Trade Management
| Stage | Action |
|---|---|
| Entry | Start with 30-50% of planned size |
| 1R profit | Move stop to breakeven |
| 1.5R profit | Take 50% off |
| 2.5R+ profit | Trail stop on remainder |
Never average down on losers.
Common Mistakes
| Mistake | Solution |
|---|---|
| Overtrading | Wait for 4+ confluences |
| Ignoring correlation | Check Sentiment before adding similar positions |
| Moving stops wider | Only move stops in your favor |
| Ignoring fundamentals mid-trade | Weekly review of open positions vs. current conditions |