Risk Management: The Only Guide You'll Actually Use
January 2026 · 10 min read
You don't need to predict the market to make money. You need to not lose money. Here's the exact risk management framework I use.
🚨 The Golden Rule
Never risk more than 2% of your total portfolio on a single trade. This alone will keep you alive through any bear market.
Position Sizing Calculator
Example: $100K portfolio, 5% stop-loss → position size = $100,000 × 0.02 ÷ 0.05 = $40,000.
Stop-Loss Strategies
Fixed % Stop-Loss
Always set a 5-10% stop from entry. Never move it away from profit (widening the loss).
Trailing Stop
Stop moves with the price. If price reverses by 5% from the peak, you're out. Locks in profits automatically.
Technical Stop-Loss
Place stop below a major support level (not a round number like $100,000).
Portfolio Allocation (2026)
| Asset Class | Conservative | Aggressive |
|---|---|---|
| BTC | 50% | 30% |
| ETH | 30% | 20% |
| Alts (Top 20) | 15% | 30% |
| Cash (Stablecoins) | 5% | 20% |
The Bottom Line
Risk management is boring but essential. The market will be here tomorrow — but if you blow up your account today, you won't be here to see it. Respect the 2% rule and you'll outlast 99% of traders.
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