What is the most heartbreaking reality of trading contracts? You might make five or ten correct judgments in a row, but then one loss spirals out of control, and the money you've earned plus the principal instantly evaporates. Many people, when reviewing their trades, still blame it on "wrong direction," but in reality, the real killer is poor management of "single trade loss ratio." Direction can be wrong, but once risk control collapses, there's no rescue. All risk management principles boil down to one point: ensure that each loss is small enough so that even if you make many mistakes in a row, your account can still survive.

So how do you set specific numbers? Here's the answer.

**Conservative approach: limit single trade loss to 0.5%~1% of account equity; even aggressive traders shouldn't exceed 2%**

Most traders, especially those new to contracts, still trying to find their feel, and easily swayed by emotions, should lock their risk per trade at 0.5%~1%. Those with more experience and a more mature, stable trading style rarely push single trade risk above 2% in the long run. Exceeding 3%? Then you're not really trading; to put it bluntly, you're risking your entire account to withstand market fluctuations, and sooner or later, you'll encounter a "black swan" that will wipe you out.

This sounds very conservative, but it addresses the real problem: allowing you to stay in the market even when you make frequent mistakes. The volatility of contracts won't be gentle to anyone, and it’s impossible to always have smooth sailing.

**Why must it be around 1%? Because once the drawdown is deep, it's almost impossible to turn things around**

Just do some quick calculations on how much you need to earn to recover from a drawdown:

If you lose 10%, you need about 11.1% profit to fully recover; if you lose 20%...