HALAL INVESTMENTOR
Halal Stock Market Investing for Beginners/Lesson 5: Risk Management & Position Sizing
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Loss recovery chart showing exponential difficulty of recovering larger losses

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The #1 Rule: Protect Your Capital

The difference between successful investors and those who lose money is not stock picking โ€” it's risk management.

Consider this: if you lose 50% of your capital, you need a 100% gain just to break even. But if you limit your loss to 5%, you only need a 5.3% gain to recover.

This is why professional traders follow the 1% Rule: never risk more than 1-2% of your total capital on a single trade.

With Rs 1,00,000 capital at 1% risk: Your maximum loss on any single trade = Rs 1,000. That's it. No matter how confident you are about a stock.