The 1% Rule: Boring, Unsexy, and the Only Reason I’m Rich

Look, I’m going to tell you something that will absolutely not go viral on TikTok.

It won’t get you 50,000 likes. It won’t make you feel like a genius. It won’t give you that dopamine hit that comes from watching your account balance swing like a pendulum in a hurricane. In fact, it’s so monumentally boring that most of you will read this, nod politely, and then immediately blow your account on some EUR/GBP scalp because “this time feels different.”

The 1% rule has made me more money than any YouTube algorithm, any Discord “signal room,” or any $5,000 “proprietary trading course” ever could.

But first, let me tell you why you won’t follow it.

The Psychology of Sexy Losses

I met a lad at a Mayfair pub about eight years ago—proper City boy type, the kind who wore Italian loafers and talked about his “edge” constantly. He’d taken £50,000 to trade Forex. Within three months, £48,000 was gone.

“What happened?” I asked.

“I risked 5% on a setup I was absolutely certain about,” he said, staring into his Guinness like it held the secrets of the universe. “Then it happened again. And again.”

He understood the 1% rule. He’d read about it, probably watched some YouTube video on it, and nodded along thinking, “Yeah, yeah, that makes sense.” But when it came time to actually execute it—to risk only £500 on a trade—it felt wrong. It felt small. It felt like he wasn’t a real trader.

So he risked 5%. Then 10%. Then he stopped calculating altogether and just went full degen mode.

This is the sticky truth that nobody wants to hear: the 1% rule is boring because it works. And humans are fundamentally attracted to excitement, drama, and the possibility of ruin.

What the 1% Rule Actually Is (And Why It’s Not What You Think)

Let me break this down properly, because half of you reading this think the 1% rule means “only risk 1% of your account on a single trade.”

You’re right. But you’re also missing the entire point.

The 1% rule means this: you risk no more than 1% of your total trading capital on any single trade. Not 2%. Not “just this once” at 3%. One percent.

If you’ve got £10,000 in your account, that’s a £100 maximum loss per trade. If your stop loss is 100 pips away, your position size adjusts accordingly. You do not decide on your position size first and then figure out where your stop goes. That’s how children trade.

Here’s the magic bit that nobody talks about:

Following the 1% rule means you can lose 100 trades in a row and still have £3,660 left in your account.

I know. I know. It sounds impossible. Let me show you the math.

If you risk 1% per trade and you lose:

• After 10 losses: 90.4% of your capital remains
• After 50 losses: 60.5% of your capital remains
• After 100 losses: 36.6% of your capital remains

Even if you’re catastrophically wrong, you’re still standing.

Now let’s talk about what happens if you’re risking 5% per trade—which, let’s be honest, is what about 90% of retail traders actually do after three drinks and a winning streak.

After just 15 losses at 5% risk: you’ve lost 53% of your account. After 30 losses: you’re down 78%.

You’re not trading anymore. You’re gambling. You’re a statistic. You’re the reason Vantage markets sends out those depressing “4 out of 5 retail traders lose money” disclaimers.

The Compound Effect (AKA: How I Got Actually Rich)

Here’s where it gets genuinely interesting, and why I’m not writing this blog post from a council flat in Croydon.

The 1% rule isn’t sexy, but it’s compounding.

Let’s say you’re a reasonably competent trader with a 55% win rate (which is actually quite good). You risk 1% per trade.

Year 1: You make 30% on your capital. Not earth-shattering, but solid.

Year 2: That compounding effect kicks in. You’re now risking 1% of a larger account. If you maintain your edge, you’re making 30% again—but on a bigger pool.

Year 5: Your original £10,000 is now roughly £37,000.

Year 10: You’re somewhere around £91,000.

Boring? Absolutely. Unsexy? Completely. But legal, sustainable, and actually achievable? Yes.

Now compare that to the alternative: the trader who risks 5%, makes £5,000 in month one (feels like a genius), then loses £8,000 in month two (panic sets in), and by month four has deleted the trading platform from his phone.

The Uncomfortable Truth

The real reason most traders don’t follow the 1% rule isn’t because they don’t understand it.

It’s because following it requires you to accept that you’re not a genius.

It requires you to accept that trading is a game of margins, of small edges played out repeatedly over years. It requires you to accept that you will have months where you make £300. It requires you to sit through periods where your account looks like it’s going nowhere while your mate from uni is posting about his Crypto gains on LinkedIn.

The 1% rule is the financial equivalent of eating your vegetables and going to the gym. There’s nothing glamorous about it. There’s no story to tell. You can’t post screenshots of your consistent, boring 2-3% monthly returns and expect people to care.

But here’s what you can do: you can still be trading in ten years. You can still have capital. You can still be making decisions instead of begging in Telegram groups for recovery signals.

The Bottom Line

I’ve been trading for twenty years. I’ve seen crypto boom and bust. I’ve seen Brexit tanks. I’ve seen the pound pummeled like a training dummy. I’ve seen Fed decisions, inflation data, and central bank interventions that made absolutely no sense.

The one constant? The traders who are still profitable, who still have accounts, who aren’t living off their parents’ inheritance—they all follow some version of the 1% rule.

It’s not controversial. It’s not revolutionary. It won’t make you rich in three months.

But it will make you rich. And it will keep you that way.

Now stop reading blogs and go calculate your position size based on 1% of your account and a sensible stop loss.

You’re welcome.

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Disclaimer: This is not financial advice. I’m just a jaded trader with opinions. Always trade responsibly, use proper risk management, and for God’s sake, use a calculator.