Trading Craft 101 · Lesson 01 — Risk First: The 1% RuleE-mini Nasdaq-100 FuturesCME_MINI_DL:NQ1!ConfluenceEdge_🔵 THE ORDER OF OPERATIONS Most traders build their system in the wrong order: find a setup first, ask about risk later. The setup is the smallest part of the edge. The order that works is the reverse: define how much you can lose, then find setups that fit that number. 🔵 THE 1% FRAME The classic frame: risk a fixed fraction of the account per trade — 1% is the standard starting point. If the account is 100,000, 1% is 1,000. On the S&P 500 future (50 per point), a 20-point stop means the position size is one contract. Risk first, size second, setup third. The percentage is personal — the order is not. 🔵 WHY SMALL WINS LONG-TERM The math is unforgiving: a 50% drawdown needs a 100% gain to recover. The trader who risks 1% per trade can survive a long losing streak and stay in the game for the winner. The trader who risks 10% per trade is always one streak away from starting over. Survival is not a side effect of risk management — it is the product. 🔵 THE R-MULTIPLE Express every result in R: the stop distance is 1R, a win of twice the stop is +2R. This converts every trade into the same currency and makes your statistics readable — win rate means nothing without the R-profile behind it. Next lesson: position sizing with ATR — how volatility sets the stop, and the stop sets the size. Educational content only. Not investment advice.