Risk First: Rules That Keep You in the Game

Chapter One — sample

Rule one is survival. It sounds too obvious to print, and yet most trading accounts do not die from one bad analysis; they die from a bad afternoon — a loss that was allowed to grow past the point where the trader could think clearly, followed by hurried attempts to win it back. Every rule in this book exists to make that afternoon impossible, or at least short.

The first working rule is a maximum daily loss: a fixed amount or percentage at which the screen goes off, whatever the market does next. Set it in rupees, not feelings — for many learners, one to two percent of capital. Reaching it is not a failure of character. It is the rule succeeding: it stopped a bad day from becoming a bad month at the exact moment your judgement was least trustworthy.

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