Transcript: The Only Risk Management Strategy Youll Ever Need

TITLE: The ONLY Risk Management Strategy You’ll Ever Need CHANNEL: Emmanuel Malyarovich DATE: 2026-03-25 ---TRANSCRIPT--- The biggest lie you have ever been told as a trader is that you need a high win rate in order to make money. But that could not be farther from the truth. What if I told you I made just shy of half a million dollars in 2025 day trading stocks? And it’s not because my strategy is superior. It’s not because I’m using a secret indicator, but it’s because I have mastered the art of risk management and limiting my losses. That is ultimately what separates an amateur trader who blows account after account from a professional trader who’s able to make money consistently. And in this video, I’m going to give you the ultimate framework on how you can begin controlling your risk. I’m going to teach you how to adopt that risk manager mindset and how you can begin practically controlling your risk with real life examples. We’re going to cover how to size your positions correctly for every single trade that you take. how to calculate risk versus reward, how spread is quietly destroying your trading profits, and I’m going to teach you some strategies that you could use to limit your losses on your losing trades. And finally, I’m going to give you a complete risk management plan that you can begin implementing within your trading starting tomorrow morning.

Before we get started, this is my Charles Schwab brokerage account. I trade on Think or Swim platform. And last week, from March 16th to March 20th of 2026, I made a little bit over $14,000 day trading stocks. And in 2025, I made a little bit over $460,000 day trading stocks. The reason I’m showing you this is to be as real and as transparent as possible and to show you that the reason I’m a profitable trader today is because I have mastered risk management and limiting my losses. That’s actually the first thing that my father taught me 5 and a half years ago when he mentored me on how to trade.

The biggest myth that I see most people believe in trading is that you need a high win rate in order to make money. That you need to be right all the time. But that cannot be farther from the truth. In fact, the best traders in the world are the ones that are excellent at being wrong. The best traders in the world are also the best losers because losing is inevitable in trading. It is impossible to be perfect. I am not paid as a trader to be right every single time. I am paid to capitalize when I am right and to limit my losses when I am wrong. And that is the definition of risk versus reward. I probably have a 40 to 50% win rate and I don’t even really track my win rate because it’s not that important for me. I focus on risk versus reward.

Most traders eat like birds and like elephants. Meaning, their winning trades are super small, but their losing trades are huge. And you could have a 60 to 80% win rate, but if your wins are small and your losses are gigantic, you’re still never going to become a profitable trader.

Results from this past week: Wednesday the 18th, I finished with $10,000 that day. I had 10 losses and 5 wins. My biggest wins were almost $7,000 and then $3,000. And my biggest loss was only a $270 loss. Same thing the day before on March 17th, I had 10 losses and 8 wins. A little bit less than a 50% win rate, but my biggest win basically covered all of my losing trades. March 16th, I had a $3,400 day with 8 losses and 6 wins.

Risk is ultimately the only part of the trade that you can control. But most traders don’t control their risk. They have no idea how much they’re risking before they get into the trade. For me personally, I know exactly what my downside is before I take the trade. I know the worst case scenario and I accept that risk before I enter.

POSITION SIZING: Position sizing determines how many shares or how many lots or how much you should be buying or shorting. You need to be sizing your position based off your predetermined risk. The formula: Share size = Risk / |Entry price - Stop-loss price|. Using ABS (absolute value) because sometimes we take short trades.

Example: SMCI trade - overnight gap down, base breakdown. Entry under the base at $22, stop-loss over the base at $22.70. Calculator gives 143 shares for $100 risk. Alternative tighter stop at $22.40 gives 250 shares with same $100 risk but better risk-to-reward. Tradeoff: tighter stop means higher chance of getting shaken out.

Example: ACXP breakout - overnight gap up, base breakout. Entry at $3.50, stop options at $3.35 (tighter, 666 shares) or $3.30 (safer, 500 shares). Balance between risk-to-reward and probability of getting shaken out.

STRATEGIES TO LIMIT LOSSES: Move stop-loss up after trade triggers and consolidates. Trail stop-loss in an uptrend by moving it to each new higher low. Raise stop to break-even if trade tags entry but loses momentum and chops sideways.

Think in R multiples: $100 risk = 1R. Aim for at least 2R on winning trades. Saving half an R or a third of an R on 50% of losing trades adds up.

RISK VS REWARD CALCULATION: Entry $10, stop $9.85 = risking 15 cents per share. Target $10.40 = reward of 40 cents per share. That’s better than 2:1, worth taking. If target was only $10.15, that’s 1:1, not worth it.

SPREAD: The difference between bid and ask price. Level two shows bid (best price buyers will pay) and ask (best price sellers will sell at). When you buy, you get filled at the ask. When you sell, you get filled at the bid. You’re instantly down whatever the spread is per share. Example: 1 penny spread on 1,000 shares = down $10 immediately. 8 cent spread on 1,000 shares = down $80 immediately. High liquidity correlates with low spread. For stocks under $15-20, maximum tolerable spread is 1-3 pennies. For scalping, only 1 penny spread maximum.

Spread should be less than 5-10% of stop-loss size. Example: Dell at $154 entry, $151 stop = $3 stop size. 15 cent spread is 5% of $3, acceptable. If spread is too high relative to stop, add spread to stop size for position calculation.

RISK MANAGEMENT PLAN:

Keep risk consistent for every trade. Don’t change risk after big wins or losses.
Scale risk gradually: $5 → $10 → $15 → $25 → $40 → $60
When in doubt, lower your risk
Never add to a losing position
Protect 50-60% of daily profits
Think in R multiples
If down 3-4R in a day, stop trading
If on a 3-day losing streak, decrease risk
Stay disciplined - risk management is simple, discipline isn’t