Risk Management and Trade Planning
Protecting Capital and Growing Consistently
Learn Smart Trading → Shaktimatha Learning Course Hub
Why Risk Management Matters
Many traders focus only on entry and ignore risk. But long-term success depends on how well you manage losses.
Protecting capital is more important than making profit.
The 1% Risk Rule
Never risk more than 1% of your total capital on a single trade.
- Capital = 100,000 → Risk per trade = 1,000
- Capital = 50,000 → Risk per trade = 500
This rule protects you from large losses and helps you stay in the market longer.
Position Sizing
Position size should be calculated based on stop loss distance.
- Smaller stop loss → Larger position
- Larger stop loss → Smaller position
Always adjust quantity to maintain fixed risk.
Risk to Reward Ratio
Every trade should have a proper reward compared to risk.
- Minimum → 1:3
- Ideal → 1:5
Even if you lose multiple trades, one good trade can recover losses.
Trade Planning Checklist
- Is the trend clear?
- Is there liquidity present?
- Am I at fair value zone?
- Do I have confirmation?
- Is risk-reward acceptable?
Only take the trade if all conditions are satisfied.
Trade Management
- Book partial profit at 1:2
- Move stop loss to entry
- Hold remaining position for larger targets
Let profits run, but control losses strictly.
Common Mistakes
- Overtrading
- Risking too much per trade
- No stop loss
- Emotional decisions
Next Page: Complete Strategy Summary and Execution Plan
Complete Smart Trading Course
Structured Learning Path
- Introduction to Smart Trading Strategy
- Candle Fair Value (Horizontal Division)
- Dynamic Fair Value (Gann Angle Concept)
- Sniper Entry Model (ICT + Gann + Fair Value)
- Risk Management and Trade Planning
- Execution Plan and Final Strategy Summary
Follow each section step by step for complete understanding
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