Risk Management
Risk management is the part of the Firecore Trader Process that protects a trade idea from becoming an emotional decision. Before entry, define the amount at risk, stop distance, position size, margin exposure, and news context.
Risk tools do not make a trade safe or profitable. They help a trader decide whether the risk is planned, limited, and worth taking.
Where this fits in the Firecore Trader Process
Market Context
Check trend, range, volatility, session timing, and high-impact news before calculating size.
Risk Check
Write the risk amount, stop distance, estimated size, and invalidation point before entry.
Execution Review
After the trade, compare the planned risk with what actually happened and log the lesson.
Choose Risk Amount
Start with a fixed percentage or dollar amount that fits the account and plan.
Define Stop Distance
The stop should be tied to the trade idea, not the desired profit.
Calculate Position Size
Position size connects risk amount and stop distance.
Pre-Trade Risk Checklist
- Risk percentage and dollar risk are written down.
- Entry, stop, and invalidation point are clear.
- Position size is calculated before entry.
- Spread, news, and margin are checked.