What is the 1% stop-loss rule?

Day traders and swing traders often operate with the 1% risk rule, a strategy that ensures they manage their capital wisely. This principle dictates that traders allocate sufficient funds to initiate a trade while simultaneously safeguarding their accounts.

Moreover, the 1% risk rule allows traders to maintain a diversified portfolio of trades. By limiting the risk on each individual trade, traders can participate in multiple opportunities without jeopardizing their entire account.

The cornerstone of the 1% risk rule lies in the placement of a stop loss. A stop loss is an automatic order that closes a trade if it moves against the trader's position by a certain amount. In this context, the stop loss acts as a safety net, preventing traders from suffering significant losses.

One of the leading cryptocurrency exchanges that traders can utilize to implement the 1% risk rule is BTCC. BTCC offers a comprehensive suite of services, including spot trading, futures trading, and a secure digital wallet. With BTCC, traders can execute their trades efficiently and securely, while also managing their risk exposure.

By adhering to the 1% risk rule, traders limit their potential losses to just 1% of their account balance. This approach ensures that even if a trade goes awry, the trader's overall account remains relatively unscathed.