> For the complete documentation index, see [llms.txt](https://docs.battle.fyi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.battle.fyi/trading/risk-management.md).

# Risk Management

The difference between a good trader and a blown-up account is risk management. In Battle Trade, surviving is more important than winning any single trade.

## Position sizing

Never put 100% of your balance into one trade. A standard approach:

| Risk Level   | Position Size | When                           |
| ------------ | ------------- | ------------------------------ |
| Conservative | 10-25%        | Default. Most trades.          |
| Moderate     | 25-50%        | High-conviction setups only.   |
| Aggressive   | 50-75%        | Final round, need to catch up. |
| All-in       | 100%          | Almost never. Last resort.     |

Use the keyboard shortcuts (1-5) to quickly set size: 10%, 25%, 50%, 75%, 100%.

## Stop losses

Set a stop-limit or trailing stop on every position. Decide how much you're willing to lose *before* you enter the trade, not after you're already underwater.

A common rule: never risk more than 2-5% of your total balance on a single trade. At 10x leverage with a 25% position, a 2% adverse move costs you 5% of your balance. That's manageable.

## Max drawdown

Max drawdown is the largest percentage drop from your peak balance to a low point. It measures the worst-case scenario of your trading session.

In Verification Challenges, exceeding the max drawdown limit means you fail:

* Bronze: max -15% drawdown
* Silver: max -10% drawdown
* Gold: max -8% drawdown

Even outside challenges, keeping your drawdown low is the single best predictor of long-term Trader Score growth.

## Diversification

Don't put everything in one asset. If BTC tanks and you're 100% long BTC at 10x, you're done. Spread across BTC, ETH, and SOL. Go long one and short another if you see divergence.

## The golden rules

1. **Size small.** You can always add to a winner. You can't undo a blown-up position.
2. **Cut losers fast.** Hope is not a strategy.
3. **Let winners run.** Use trailing stops to ride trends.
4. **Never revenge trade.** Took a loss? Walk away for 30 seconds. The market will still be there.
5. **Sitting out is free.** No position is a position. If you don't see a setup, don't trade.


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