Risk Management
Master the principles of stop loss, position sizing, diversification, and disciplined trading to protect your capital.
Stop Loss & Target Levels
A Stop Loss (SL) is a predetermined exit price that limits your maximum loss on a trade. A Target is the price at which you book profits. Always set both before entering a trade — this removes emotion from decision-making. In Virtual Trading 2.0, you can set SL and Target at the time of order placement, and the app automatically exits your position when either level is hit.
Stop Loss & Target Levels
SL ₹2,850
-1.7%
Entry ₹2,900
Target ₹3,100
+6.9%
Position Sizing
Position sizing determines how much capital you allocate to a single trade. A common rule is to never risk more than 2% of your total capital on any one trade. For example, with ₹10 Lakhs virtual capital, your maximum risk per trade should be ₹20,000. Calculate position size as: (Capital × Risk%) ÷ (Entry Price − Stop Loss). This ensures a string of losing trades doesn't wipe out your account.
Position Sizing Rule
Diversification
Diversification means spreading your capital across different sectors, segments, and asset types. Don't put all your virtual money into a single stock or sector. Allocate across Equity, F&O, and MCX to reduce overall portfolio volatility. If one sector tanks, gains in others can cushion the blow.
Risk : Reward Ratio
Reviewing Your Performance
Regularly review your trade reports to identify patterns in your winning and losing trades. Are you consistently losing on options? Are your equity trades profitable but F&O trades hurting? Use the Reports section to generate weekly and monthly P&L statements. Understanding your performance data is the only way to improve as a trader.
P&L by Segment
+₹8,400
+4.2%
-₹3,200
-1.6%
+₹1,800
+0.9%
Key Takeaways
- 1
Always set a Stop Loss before entering a trade — no exceptions.
- 2
Risk no more than 2% of your capital on a single trade.
- 3
Diversify across sectors and segments to reduce portfolio risk.
- 4
Review your trade reports weekly to find and fix recurring mistakes.
Pro Tip
The best risk management strategy is the one you follow consistently. Set SL and Target at order time so you don't second-guess yourself when the market moves against you.