THE 2% TRADING RULE (NEVER BREAK IT)
What Is the 2% Rule?
The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To implement the 2% rule, the investor first must calculate what 2% of their available trading
account is: Example: $5,000.00 account equals
$100.00 risk per trade.
Key Takeaways:
The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any
single trade.
To apply the 2% rule, an investor must first determine
their available capital.
Stop-loss orders can be implemented to maintain the 2% rule risk threshold as market conditions change.
How the 2% Rule Works
The 2% rule is a restriction that investors impose on their trading activities in order to stay within specified
risk management parameters. For example, an investor who uses the 2% rule and has a $100,000 trading account, risks no more than $2,000-or 2% of the value of the account-on a particular investment.
The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To implement the 2% rule, the investor first must calculate what 2% of their available trading
account is: Example: $5,000.00 account equals
$100.00 risk per trade.
Key Takeaways:
The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any
single trade.
To apply the 2% rule, an investor must first determine
their available capital.
Stop-loss orders can be implemented to maintain the 2% rule risk threshold as market conditions change.
How the 2% Rule Works
The 2% rule is a restriction that investors impose on their trading activities in order to stay within specified
risk management parameters. For example, an investor who uses the 2% rule and has a $100,000 trading account, risks no more than $2,000-or 2% of the value of the account-on a particular investment.
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