I would like for this thread to be a repository of risk management rules and disucssions about the merits/demerits and validity of such rules. Risk management is essential to trading success, but typically ignored. Issues to be discussed include: Margin usage MER (margin-to-equity ratio) in futures Leverage restrictions Correlation Stops Position sizing Diversification Market Selection Please list worthy risk managment rules and if they fall into one of the above categories - indicate which one. also include a short paragraph explaining your rationale for the rule and your experience (if any) using this rule. Let's stay on topic I hope this will be a thread that will benefit all ETs. Thanks in advance for your participation.