Breakout
Companion Guide Purchase an Evaluation
RISK MANAGEMENT PLAYBOOK

Module One: Risk Management

Watch the full video alongside our detailed notes and extra learning resources in this full cheat sheet companion guide.

Ready to trade?
Take what you learn here into a real evaluation. Pass, get funded, keep 80-90% of profits.
Purchase an Evaluation
01
Section 1 0:24

Percentage of Account at Risk

What you'll learn: The 1-2% rule, how to translate that into actual dollar risk, and the two levers (position size and stop distance) that move the number.

Key Moments
Core Concepts
Critical Takeaways
  • Stick to 1-2% risk per trade. On $100K that's $1,000-$2,000 of pain per setup.
  • Two ways to hit your target risk: change position size, or change stop distance.
  • Don't move the stop to make the size fit. Set the stop where the trade idea is wrong, then size to match.
  • The on-screen P&L estimate ignores fees. Add them in your head, or stop a touch earlier.
Weekly Newsletter

Get smarter about crypto markets, every week.

Trade ideas, structure breakdowns, and fresh learning resources - delivered straight to your inbox. Free. No spam.

02
Section 2 2:45

Reward to Risk

What you'll learn: Why a 3:1 trade lets you be wrong twice for every win and still profit, and how the on-chart RR tool decides whether a trade is worth taking.

Key Moments
Critical Takeaways
  • Reward-to-risk decides what win rate you need. 2:1 needs ~33%. 3:1 needs ~25%. 1:1 needs 50%+.
  • Drop the RR tool on the chart, set entry/stop/target, and read the number. If it's worse than 2:1, walk away.
  • A good trade has both a sensible RR and a risk inside your 1-2% cap. One without the other is a coin flip.
Practical Tip

Use the long-position tool on TradingView (or the in-terminal version) to set entry, stop, and target. The colour-coded box shows you the live RR before you commit.

03
Section 3 3:59

Invalidation & Stop Placement

What you'll learn: How to decide where your trade idea is wrong, then size the trade backwards from that level so the maths still works.

Key Moments
Critical Takeaways
  • The stop goes where the trade idea is broken. Not where you're "okay losing".
  • Mark entry, stop, and target before you size. Then size to match.
  • A trade with no clear invalidation isn't a trade. It's a guess.
  • The point of pre-set risk is so a wrong trade is an expected loss, not a surprise.
04
Section 4 6:56

Fixed vs Variable Risk

What you'll learn: Why some traders risk the same on every setup and others scale risk to conviction - and the rules you need before going variable.

Key Moments
Core Concepts
Critical Takeaways
  • Start fixed. One percentage, every trade. Build the habit before you build the variable model.
  • Variable risk needs a real grade system. If you can't name what makes a setup A vs B, you're not ready.
  • High time frame trades usually deserve more weight. Low time frame scalps deserve less.
  • The risk model is part of your strategy. Pick one and follow it.
05
Section 5 9:20

Position Sizing

What you'll learn: The formula that turns "I want to risk 1%" into "I'm buying X coins" - and why the order panel does it for you anyway.

Key Moments
Core Concepts
Critical Takeaways
  • Account × risk % ÷ stop distance % = position size. Three inputs, one number.
  • Wider stop = smaller position. Tighter stop = bigger position. Same dollar risk either way.
  • You don't have to do the maths manually. The order entry panel calculates as you type.
  • If the math doesn't balance, fix the inputs - don't fudge the position.
06
Section 6 11:48

How Leverage Actually Works

What you'll learn: Why leverage decides your margin, not your risk - and the common mistake that turns a 1% risk trade into a 10% loss.

Key Moments
Core Concepts
Critical Takeaways
  • Leverage = margin efficiency. It doesn't add risk by itself.
  • 5x on BTC and ETH, 2x on altcoins, applied automatically on Breakout accounts.
  • Position size × distance to stop = your real risk. Leverage doesn't change either.
  • Breakout has no margin rules. You can put up the full available margin on one trade. That doesn't mean you should.
Putting It All Together

Your Risk Framework

Run this before every trade. With practice it takes ten seconds.

1

Pick the % risk

1% if you're starting out. 2% if the setup is A-grade and you're proven.

2

Find invalidation

Where on the chart does this trade idea break? That's where the stop goes.

3

Set the target

Where does the trade pay you? Mark it.

4

Check the RR

Drop the long/short tool. If it's worse than 2:1, the trade isn't worth taking.

5

Size from the formula

Account × risk % ÷ stop distance % = position size. The order panel does it for you.

6

Watch the margin

Confirm leverage is applied, margin is acceptable, fees are factored in.

7

Practice on Breakout

Start a trading test at breakoutprop.com. Real markets, structured risk - the best way to learn.

Put it to work
Take what you learned here into a real evaluation. Pass, get funded, keep 80-90% of profits.
Purchase an Evaluation