The core of risk control by top traders: protect your principal first, then talk about profits; lock in losses with rules, and use probability and odds to magnify gains. Below is a minimalist, practical set of approaches they generally follow.

One, Principal Protection: the 1% per-trade rule

- Per-trade risk ≤ 1% of your account (max 2%).
Formula: Position size = (Account × 1%) ÷ Stop-loss room.
Example: With a 100,000 account, a 50-point stop-loss → you can lose at most 1000 each time. Position size = 1000 ÷ 50 = 20 units.
- Never add to a losing position.
- When daily losses reach 1–2%, it’s mandatory to stop.

Two, Stop-loss: exit in three dimensions—don’t “hold the bag”

- Price stop-loss: decide it before entering; cut at your target price (commonly ATR, support levels).
- Time stop-loss: if it hasn’t started moving for a long time after entry (e.g., 2–3 days), exit directly.
- Logic stop-loss: if the reason for entering disappears (e.g., after a breakout it retraces), close unconditionally.
- Retail traders often hold through losses of 30%+; the professional average stop-loss is only 3.8%.

Three, Odds: trade only setups with odds of 1:2 or higher

- Risk-reward ratio ≥ 1:2 (preferably 1:3).
Risk 1 yuan to make at least 2 yuan; a 33% win rate is enough to break even.
- Only take high-certainty opportunities: cut trading frequency by 50%, and returns can actually be higher.

Four, Position and leverage: low exposure so you last longer

- Don’t go all-in or heavily overweight: for a single instrument ≤ 20%, and total market exposure ≤ 50%.
- Be extremely cautious with leverage: contracts commonly use 1–3x; in extreme market conditions, reduce to 1x or stay flat.
- Diversify but don’t overdo it: focus on 2–3 highly correlated products, and avoid ineffective diversification.

Five, Systematization: isolate emotions with rules

- Before entering, fill in a mandatory decision checklist: spell out the logic, stop-loss, take-profit, and position size—if any part is missing, don’t trade.
- No-trade list: filter out choppy ranges, news-driven markets, and low-liquidity time periods.
- Emotional management: when anxiety runs high, reduce position size or stop trading; after a loss, enforce a mandatory rest of 15–30 minutes.

Six, Psychology: treat risk as a cost, not a failure

- Accept that consecutive losses are normal; a 1% drawdown is a system cost, not a problem with your ability.
- Don’t aim to be right on every trade; aim to earn enough when you’re right, and lose as little as possible when you’re wrong.

Seven, One-sentence summary

1% position control + hard stop-loss + 1:2 odds + low leverage + iron discipline = long-term survival and profitability.
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