When we review a blown account with a student, the postmortem almost never turns up one catastrophic trade. It turns up a stop-loss that was technically in place — just sized against the wrong number.
The mistake: sizing against the trade, not the account
A trader decides they're comfortable losing ₹2,000 on a trade, places a stop, and moves on. What they haven't done is check what ₹2,000 actually represents as a percentage of their trading capital that week. On a smaller account after a losing streak, that same ₹2,000 stop might now represent 8-10% of remaining capital instead of the intended 1-2%.
Risk has to be recalculated against your current capital, not your starting capital or a round number you liked once. This is the single adjustment that separates traders who survive drawdowns from traders who don't.
A simple rule that works
Before every trade, we ask students to answer one question first: what percentage of today's account balance does this stop-loss represent? If the honest answer is above 2%, the position gets smaller — not the stop-loss further away.
Why 'wider stop, same size' is the wrong fix
A common instinct after getting stopped out repeatedly is to widen the stop so the trade has 'more room.' This almost always makes things worse, because it increases risk per trade exactly when discipline should be tightening, not loosening. Smaller size, same structure-based stop — never the other way around.
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