Today I will be going back to my roots a little. As a former EUR futures day trader I can hopefully pass on some useful information.
I had a question on my linkedin the other day and thought it would make an interesting read.
I was asked:
“How do you manage risk, I am day trading the Nasdaq on the US open and I lost 3% today after being up 2%”.
The problem here is over leveraging and not having a risk limit on the day.
Being up 2% and the market turning on you happens, but we can control what we do next.
The key here is to have a plan when managing risk in a high emotional environment.
Scalping and day trading plays with your emotions.
One simple fix.
Here’s the golden rule I wish someone had told me earlier:
Only use your trading profits as risk once you’re up for the day.
If you’re up 1–2%, that’s your permission to trade more but only with those profits.
You’re no longer risking your capital, you’re risking the market’s money.
It’s a small mental shift, but it’s massive for consistency.
You’ll stop over-trading and you’ll protect your base.
Some rules I made:
Set a hard daily loss limit. I liked to use 0.5% because I knew that it would keep me in the game longer. Trust me trying to recover a 3-5% drawdown can be stressful in itself.
If the market conditions change, get out. Don’t try to be a hero. We are trying to be here for a long time, not a short time.
The market isn't about how much you make, it’s how much you can keep.
If you’re serious about becoming consistent, make this your rulebook:
Earn first.
Then risk.
And always protect capital.
Because in trading, longevity beats intensity.