Risk Management & Psychology

Protect your capital with proven money management techniques and trading psychology principles.

The Psychology Foundation

Trading isn't just about charts, indicators, or even strategy — it's about how you manage yourself. The truth is, your results as a trader have more to do with your discipline, patience, and mindset than any technical tool.

In fact, many experienced traders agree: trading is 90% psychology and only 10% execution.

Most traders fail not because they don't know how to draw levels or read patterns, but because they can't control their emotions. Fear, greed, impatience, and self-doubt all cause traders to break their rules.

Our goal here is to give you a clear path for building the discipline and mental resilience that will make your strategy sustainable.

Position Sizing Rules

Risk management begins with knowing how much to risk per trade. Position sizing ensures that even when you lose (and you will), your account survives.

The 1-2% Rule

A common rule of thumb is risking no more than 1–2% of your account per trade. That way, even a string of losses won't wipe you out.

Think of it as protection

Think of position sizing as the seatbelt in your trading car. You may not always need it, but when things go wrong — it saves you.

Risk–Reward Ratios

The most powerful tool a trader has is the risk–reward ratio. This is the balance between what you stand to gain and what you're willing to lose. For example, risking $100 to potentially make $300 is a 1:3 ratio.

The math is simple but powerful:

  • If you keep your average trades at 1:3, you only need to be right about 30–35% of the time to stay profitable.
  • This flips the game. You don't need to win every trade — you just need to manage your losses and let your winners run.

On the site, we'll include a simple chart download that customers can copy and use daily. It visually reinforces how favorable ratios stack the odds in their favor.

Trading Psychology

This is the hardest part. Technical skills can be learned quickly, but mental discipline takes time and practice.

The key principles are:

Patience

The ability to wait for your setup, not chase noise.

Discipline

Following your plan even when emotions tempt you otherwise.

Detachment

Seeing trades as probabilities, not personal wins or losses.

Consistency

Treating trading like a business, not a gamble.

Here's the mindset shift:

  • View losses as tuition. Every dollar you spend learning is an investment in yourself.
  • Treat your role like a risk manager at a firm. Your job isn't to win every trade, it's to protect capital and execute your plan.
  • Make trading an extension of your personality, not a daily fight against emotions.
Why This Matters for You

We don't just want you to learn charts — we want you to become a consistent trader. That means giving you free resources, like the discipline chart, and showing you exactly how professional traders manage risk.

With the videos, visuals, and downloadable tools we're providing, you'll not only understand the concepts but also be able to apply them immediately.

Remember:

The best strategy in the world is worthless without proper risk management and psychological discipline. Master these fundamentals, and you'll have the foundation for long-term trading success.

🎉 Congratulations! Course Complete

You've completed all 5 modules of the FVGs Are Not Real trading course. You now have the knowledge to trade with proven strategies instead of unreliable patterns.