Chat With Traders 005: Steve Burns – What Separates New Traders From Rich Traders—and How to Cross the Divide
19 snips
Jan 29, 2015 AI Snips
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Steve's Severe Early Drawdown
- Steve Burns lost 50% of his trading capital around 2000-2002 due to aggressive position sizing and a long bias in tech stocks.
- This severe drawdown was a hard but crucial lesson that changed his approach to risk and trading.
Strict 1% Risk per Trade
- Never risk more than 1% of your trading capital on a single trade to avoid severe drawdowns.
- Keep total exposure to risk across all positions below 3% to protect your account on bad days.
Start Trading With Adequate Capital
- Start with sufficient capital to avoid risking too large a percentage per trade and blowing up.
- At least $25,000 to $30,000 is needed to actively trade with effective position sizing and risk control.