Why Risk Management Matters
Most traders think about risk as "how much do I risk per trade?" That's important — but it's only one piece. Complete risk management answers a much broader set of questions:
- How much do I risk per trade?
- What's the most I'll lose in a day? In a week? Ever?
- How many trades can I have open at once?
- What do I do when markets are correlated and I'm exposed on multiple fronts?
- How do I handle high-impact news events?
- What if I can't get my stop filled at the right price (slippage)?
- What if I make an execution error?
- What if my platform goes down?
- Am I in the right state to be trading today?
TradingPlan's Risk Management section helps you build rules for all of these. The ones every trader needs are available on the free plan. The advanced risk rules — which serious traders should have — are available on Pro.
What's Included on the Free Plan
Position Sizing
Define how you determine your trade size:
- Fixed Percentage — risk a set percentage of your account on each trade (most common for retail traders)
- Fixed Lot — trade a fixed position size regardless of stop distance
- Fixed Amount — risk a specific cash amount per trade
- Custom — describe your own method in free text
Drawdown Limits
Set automated stop-trading thresholds:
- Drawdown Limit — a loss limit per day, week, or month. When hit, you stop trading for that period
- Max Total Drawdown — the absolute maximum you'll let your account fall before you stop entirely and review
These two rules alone save many traders from catastrophic losses during bad runs.
What's Included on Pro
Pro unlocks eight additional risk categories, each covering a distinct risk vector:
| Section | What it covers |
|---|---|
| Concurrent Trade Risk | Maximum number of simultaneous open positions; maximum total live risk across all open trades |
| Asset Correlation Risk | Exposure limits when trading correlated markets (e.g. multiple USD pairs, gold and silver simultaneously) |
| Spread Risk | Maximum acceptable spread before entry — prevents entering trades when market liquidity is poor |
| News Risk | Rules for trading around high-impact economic events — buffer times, actions during news, and skip-whole-day options |
| Slippage Risk | Maximum acceptable execution slippage — prevents staying in a trade that was filled far from the intended price |
| Overnight / Weekend Risk | Rules for holding positions outside of trading hours — whether you hold overnight, over weekends, and any position size adjustments |
| Execution Error Risk | Protocol for when you make a mistake (wrong size, wrong direction, wrong instrument) — how quickly you exit, how you log it |
| Conditions to Trade | A personal checklist of the conditions that must be met before you'll trade at all — sleep, emotional state, preparation, focus |
| Technology Risk | Contingency plan for platform failures, internet outages, and other technical problems |
See Advanced Risk Features (Pro) for detailed guidance on each.
Where to Find Risk Management
Go to Trade Plan → Risk Management.
Changes are not saved until you tap the Save button in the top-right corner. If you go back without saving, you'll be prompted to discard or keep your changes.
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