How not to blow your account as a beginner

Updated: 7 November 2026

In short: Risk no more than 1% per trade, always use a stop-loss, avoid high leverage, do not try to win back losses and stop for the day after two or three losses in a row. Most blown accounts come from breaking exactly these rules.

Five rules

A fixed risk per trade. The stop-loss goes in with the entry and is never moved further away. Leverage is a result of position sizing, not a way to "boost" the account. A daily loss limit. Trading only by your own plan.

If you are already losing

Stop for a few days, go back to a virtual account and use the journal to sort trades that followed the plan from those made on emotion.

One blow-up and how it could have been stopped

Account $1,000. The first trade, with no stop, goes $80 into the red — the trader "waits for it to come back". The second — double size to win it back: another −$150. The third — with all the remaining leverage. Each of these steps could have been stopped by one rule: a stop in the first trade would have capped the loss at $10, and a two-losses-a-day limit would have prevented the second and third.

Warning signs

You open a trade right after a loss. You cannot say where your stop is. Every trade has a different size, "by feel". You topped up the account more than once this month. You trade at night instead of sleeping. Any one of these is a reason to close the terminal for the day and reread your trading plan.

A rescue plan if you are already in a drawdown

Stop for 2–3 days. Write out your last 10 trades and find the common mistake. Halve your risk. The next 20 trades — only by plan and only on a virtual account or with the minimum size. The goal is not to get the money back fast but to get control back. The money returns only together with control.