but the earlier you understand the concept of risk management and capital preservation while being discipline and consistent then that's the beginning of your breakthrough in trading.

On this thread I will be breaking down key concept on RM, account sizing and realistic expectations.

Let’s talk about how to survive & thrive using risk, account size & realistic expectations 👇

Account Size Matters 📊

$100 is NOT the same as $10,000.

Big accounts = more room, more profit per move.

Small accounts = focus on survival, not flipping.

The faster you flip, the faster you’ll blow it.

Preserve capital → Compound → Grow.

The Core of Risk Management

Risk management = capital preservation.

Losses are inevitable. The only question is:

👉 How do you survive them without blowing up?

Answer: A clear risk-to-reward (RR) plan + discipline.

Risk Management Plan for Small Accounts ($100–$1,000)

Example: $100 account

Risk per trade: 5% = $5

Risk:Reward = 1:4

Target per trade: $20

Even with just a 30% win rate (3 wins, 7 losses)…

You still grow to $125 ✅

Why does this work?

Because your wins ($60) outweigh your losses ($35).

That’s the magic of sticking to RR & consistency.

Not every trade needs to win, discipline compounds.

Risk management plan for prop firms

Trading rules and regulations varies from different prop firms base on maximum DD, daily DD, profit target etc.

But I will be using the most common rules provided by most prop firms and $10,000 account size for the illustration.

ACCOUNT SIZE: $10,000

DAILY DRAWDOWN: 5% = $500

MAXIMUM DRAWDOWN: 10% = $1,000

PHASE 1 & 2 TARGET: 10 & 5%

Execution plan

OVERALL PROFIT TARGET = $1,500

RISK TO REWARD: 1:4RR

RISK PER TRADE: for this case scenario for us to get our risk per trade we need to divide the maximum drawdown into series of trade, and this is based on your trade style and strategy, for this example I will be using my personal plan.

⬇️⬇️

RISK PER TRADE = (maximum drawdown ÷ by 30 trades)

= 1000 - 30 = $33

PROFIT PER TRADE = 33 x 4 = $132

Now since we have divided the trades to 30 let’s say 20 trades was lost and 10 was profitable

Loss = 33 x 20 = $660

Profits = 132 x 10 = $1325

PNL = 1000 - 660 + 1325 = $1665

P.S: you should limit your trades and losses per day to 3 trades maximum and 1 losses allowed per day.

If you stick to this risk management plan with phase 1 and 2, all you need is discipline and consistency.