Risk Management
ICT Trading Risk Management: Position Size, Stops and R-Multiples
Risk management is independent of whether a trader uses ICT, price action, indicators or another methodology. A trading idea needs a defined invalidation point and position size before the order is placed.
Risk per trade
Choose a fixed maximum loss as a percentage or fixed amount of account equity. The appropriate level depends on the trader and account; there is no universal percentage that guarantees safety.
Position size from the stop
Position size should be calculated from the amount you are willing to lose and the distance to the invalidation point. A tighter stop should not automatically mean a larger position if the market structure does not justify the tighter invalidation.
Think in R
R represents the amount initially risked. A trade that risks $50 and makes $100 returns +2R; a trade that loses $50 is -1R. R-multiples make results easier to compare across different account sizes.
Protect against drawdown
Set daily and weekly loss limits, avoid increasing size to recover losses, and keep a journal. A strategy can have positive historical expectancy while a trader still fails through inconsistent execution or oversized positions.
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