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Day 5 – Orders, Stops, and How Not to Blow Up Your Account
Alright, soldier. You’ve learned the basics, explored the charts, and peeked at what moves the market.
Now it’s time for the part that actually keeps you alive in this jungle: risk management.
Because here’s the truth — you can be wrong half the time and still win, if you know how to control your losses.
The Golden Rule: Protect Your Capital First
Forget “how to make money.”
The real question is:
How do I avoid losing it all before I learn how to trade?
Trading is like a video game — your capital = your HP bar.
Once it’s empty, game over.
No restart.
Understanding Order Types (Because Buttons Matter)
Market Order
You buy or sell right now at the best available price.
Fast, but risky during volatility — you might get filled higher or lower than expected.
Limit Order
You set your own price.
The trade triggers only if the market reaches it.
Perfect for patience, not for panic.
Stop-Loss Order
Your emergency exit.
It automatically closes your trade when things go south.
Set it smartly — not too tight (you’ll get kicked out early), not too wide (you’ll bleed).
Take-Profit Order (TP)
This one locks in your gains automatically when your target hits.
Set it before greed starts whispering in your ear.
Trailing Stop
A dynamic stop-loss that moves with the price when you’re winning.
Like a loyal bodyguard that backs you up until the fight turns ugly.
When Stop-Loss and Take-Profit Fail
They’re not magic buttons — sometimes they don’t trigger exactly where you set them.
Here’s why:
- Extreme volatility: price jumps over your level before the system can fill it.
- Low liquidity: not enough buyers/sellers at your price.
- Spread widening: brokers raise the gap temporarily.
So always double-check your levels and avoid over-leveraged trading during high-impact news.
The 1% Rule: Small Risk, Big Survival
Never risk more than 1% of your total balance on a single trade.
Sounds boring, but it’s how pros survive losing streaks.
If you have $1,000, your maximum loss per trade = $10.
That’s it. No exceptions.
This way, even after 10 bad trades in a row, you’re still in the game.
The Psychology Trap
You’ll get tempted — every trader does.
After a big win, you’ll feel invincible.
After a loss, you’ll want revenge.
That’s your inner gambler talking.
Mute it.
Trading is not about being right; it’s about staying consistent.
Your Mission Today
- Open your demo or small trading account.
- Practice placing:
- A market order
- A limit order
- A stop-loss + take-profit combo
- A market order
- Watch how they behave when prices move.
This is your sandbox — break things here, not with real money.
Quick Recap
✅ Protect your capital.
✅ Know your order types.
✅ Always use a stop-loss.
✅ Never risk more than 1% per trade.
✅ Don’t trade when you’re emotional, hungry, or tired.
Next: The Art of Not Overcomplicating Everything