The 1% rule in day trading refers to a trading risk management strategy that limits the maximum amount of capital that a trader can lose on any given trade to 1% of their trading account balance. The basic idea is that by limiting the amount of money that can be lost on a single trade, a trader can help protect their trading account from significant losses and ensure that they have enough capital to continue trading. For example, if a trader has a trading account balance of $10,000, they would limit their maximum risk on any given trade to $100 ($10,000 x 1%). This means that if a trade goes against them and the maximum allowable loss is reached, they would exit the trade to limit their losses. The 1% rule is a widely accepted trading risk management strategy among day traders, but traders should also consider other factors such as the size of their positions, the volatility of the securities being traded, and their overall risk tolerance. It's also important to regularly review and adjust trading risk management strategies based on changing market conditions and trading performance. The Traders4Traders course take you into depth on how to manage your risk in more detail. ChatGPT