🍯 The Honey Pot
Protecting Your Trading Money
Before we chase a sweet setup, honey, let's learn to protect the money in our practice account.
Three Rules for Your Honey Pot
1. Decide your risk first. Pick a small practice loss limit before entering a trade.
2. Know your stop. A stop-loss is an order intended to exit when price reaches a trigger, but execution may be worse than expected, especially during fast markets or gaps.
3. Size the trade. Your position size depends on the dollar amount you plan to risk and the distance from entry to stop.
🐝 Honey Pot Practice Calculator
Use imaginary stock trades to practice. Enter your pretend account size, planned risk percentage, and stop distance per share.
Educational arithmetic for unleveraged stock examples only. Ignores commissions, slippage, gaps, position affordability, and broker restrictions. Actual losses can exceed the planned amount.
🍯 Queen Bee Tip
Protecting your Honey Pot is more important than winning one trade. Never increase your position just to recover a loss. Practice with pretend money until you understand the risks.
Quick Quiz, Honey!
Your practice account has $2,000. You plan to risk 1% on one trade. What is your planned dollar risk?
✍️ Honey Homework
Make three practice scenarios with different account sizes and stop distances. Calculate the planned risk and explain why a stop order cannot guarantee the exact exit price.
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