The amount you stand to lose on a single trade if your stop loss is hit, often set as a small percentage of your account. Keeping it fixed stops one bad trade from doing major damage.
With a $20,000 account and a 1% rule, you risk $200 per trade, no matter how confident you feel.
Boring but important. Small, steady risk keeps you in the game.
The amount you're willing to lose on one trade, decided before you buy.

What you lose on one trade if stopped.
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by Mark Douglas
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