L1.1 — Risk Percentage: The Only Variable You Fully Control

In trading, you cannot control whether a trade wins or loses. You cannot control where price goes after your entry. The single variable that is entirely within your control is how much of your account you risk on each trade. This is expressed as a percentage of total equity — typically between 0.5% and 2% per trade for a structured approach.

Fixing your risk percentage means that every trade, regardless of your confidence level, carries the same monetary risk. A trade you feel strongly about does not get 5% risk because "it looks great." It gets 1%, the same as every other qualified setup. This rule prevents the catastrophic scenario where your highest-conviction trades are also your largest losses.

Start with a risk percentage that feels almost too small. 0.5% per trade on a 1,000-account means a maximum loss of five dollars per trade. That feels inconsequential — which means you will execute the rules without emotional interference. As your process proves itself over 50-100 trades, you can scale. But the percentage discipline itself never changes.