Risk Management Checklist
The arithmetic and limits to confirm before any position is opened, on a single page.
Per-trade arithmetic
Three numbers, calculated the same way every time.
- Risk amount = equity × fixed risk percentage
- Risk per unit = stop distance × value per point
- Size = risk amount ÷ risk per unit
Account-level limits
Per-trade rules are insufficient without exposure caps above them.
- Maximum total open risk
- Correlated exposure cap
- Daily and weekly loss limits
- Reduced-size rule during drawdown
Break-even reference
Know the win rate your reward-to-risk requires before costs: roughly 50 percent at 1:1, 33 percent at 2:1, 25 percent at 3:1.