Thinking in R: stops, targets, position size and surviving losing streaks.
What is 1R? Your risk per share: the distance from entry to stop. Buy at $100 with a stop at $90, and 1R is $10. Read the guide
What's the minimum reward to aim for? At least 2R. If 1R is $10 on a $100 entry, the target is $120. Read the guide
How do you calculate position size? Risk per trade divided by 1R. Risking $1,000 with a $10 stop distance means 100 shares. Read the guide
Capital vs risk: what's the difference? Capital is what you have. Risk is what you're willing to lose on one trade, for example 1% of a $100,000 account, or $1,000. Read the guide
How much should you risk per trade when starting? A small, fixed slice: 0.25% to 1% of your trading account, or $250 to $1,000 on $100,000. Read the guide
Do you need a high win rate to be profitable? No. Risking 1R to make 2R over 100 trades at a 50% win rate nets +50R. Even 35 to 40% can be profitable. Read the guide
What should you do in a losing streak? Expect them: 5 to 7 losses in a row is normal. Never size up to win it back; cut risk (say 1% to 0.5%) if emotions kick in. Read the guide
What's the rule when you hit your max loss for the day? You're done. Close the charts, open your journal, and write down what you did, not what the market did. Read the guide
How do you calculate expectancy? Average win × win rate − average loss × loss rate. It tells you whether a strategy has an edge; win rate alone doesn't. Read the guide
What's on the pre-trade checklist? Entry, stop (1R), position size, a target of at least 2R, and your risk per trade confirmed. If any step is missing: no trade. Read the guide
What is the core & satellite split? Core (70 to 80%): long-term index funds, ETFs and blue chips. Satellite (20 to 30%): active trading with fixed risk per trade. Beginners can start the satellite at 10% or less. Read the guide