The 3-5-7 Rule: Your Shield Against Trading Losses

If you are still playing roulette with your money in crypto, you need to read this.

The Gold Triangle of Risk Management

Traders who manage to survive years in this game are not the ones who predict the next pump of Solana. They are the ones who understand one thing: losing money is inevitable, but bankruptcy is not.

That’s why the 3-5-7 Rule exists, developed by veteran traders who learned the hard way:

3%: Never risk more than 3% of your capital in a SINGLE trade. Period. If your account has $100k, a maximum of $3k at risk per trade. This prevents a liquidation from wiping out your portfolio.

5%: Your TOTAL exposure in open positions cannot exceed 5% of the capital. Imagine: you have $50k. So a maximum of $2,500 in all your active trades combined. This way you won't get trapped if the market suddenly turns.

7%: Your gains must be at least 7% larger than your losses. If you lose $300 on a trade, you must gain $900+ on the successful ones. This ensures that even with a 40% success rate, you come out profitable.

Why It Works

It's not magic. It's cold mathematics:

• You protect your capital from extreme volatility
• You avoid being “all-in” on a single asset
• Be selective: only make really good trades.

The Reality

The theory is nice. Discipline is what fails. Because when you see a 50% pump in 2 hours, your brain screams “FOMO”. This is where the 3-5-7 Rule acts as your emotional bodyguard.

Consistent traders? Those who follow these rules even when it hurts not to.

Trading is not about winning trades. It's about surviving long enough for the statistics to work in your favor.