In the world of trading, one of the most important principles is risk management. Traders who are successful in the long-term understand that it's not about how much money you can make, but how much you can keep. That's why some of the most successful traders in the industry only risk 1% of their capital on each trade.

Here are some examples of top traders who have implemented this principle and have achieved great success in their careers.

1. Paul Tudor Jones

Paul Tudor Jones is a legendary trader who is known for his macroeconomic analysis and trend-following strategies. He founded Tudor Investment Corporation, a leading hedge fund, in 1980. Jones is famous for his quote, "I believe the best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms."

Jones has always been a strong proponent of risk management and has stated that he never risks more than 1% of his trading capital on any single trade. He believes that this approach not only helps to minimize losses but also keeps him disciplined.

2. Ed Seykota

Ed Seykota is another legendary trader who is known for his trend-following strategies. He has been in the trading industry since the 1970s and is considered to be one of the pioneers of computerized trading systems. Seykota is also known for his focus on risk management and his ability to manage losses.

In an interview with Jack Schwager for his book Market Wizards, Seykota stated that he always risked 1% of his trading capital on any single trade. He believes that this approach helps to keep him in the game and prevents him from blowing up his account.

3. Linda Raschke

Linda Raschke is a well-known trader and author who has been in the trading industry for over 30 years. She is known for her short-term trading strategies and her ability to consistently make profits in the markets. Raschke is also a strong proponent of risk management and believes that it's one of the most important factors in successful trading.

In an interview with Trading Heroes, Raschke stated that she always risked 1% of her trading capital on any single trade. She believes that this approach helps her to keep her emotions in check and prevents her from taking on too much risk.

4. Richard Dennis

Richard Dennis was a commodities trader who is known for his Turtle Trading System. He trained a group of traders, known as the "Turtles," in the 1980s, and many of them went on to become successful traders in their own right. Dennis is also known for his focus on risk management and his ability to manage losses.

In an interview with Jack Schwager for his book Market Wizards, Dennis stated that he always risked 1% of his trading capital on any single trade. He believes that this approach helps to minimize losses and keeps him in the game.

Conclusion

These are just a few examples of the top traders who only risk 1% of their capital on each trade. While this approach may seem conservative, it has proven to be effective over the long term. By limiting their risk, these traders are able to preserve their capital and avoid big losses that could potentially wipe out their portfolio. Aspiring traders can learn a lot from these successful traders and should consider implementing similar risk management strategies in their own trading.

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