What's the first thing you'd teach a friend about risk?

Imagine a friend opens a live account tomorrow. You get one lesson to give them before they place a trade. What is it?

What's the first thing you'd teach a friend about risk? — risk-reward diagram
A risk-reward ratio of 1 to 2

Post:

  • the lesson, in one or two sentences
  • why it comes first
  • the mistake it prevents
What's the first thing you'd teach a friend about risk? — candlestick anatomy diagram
The parts of a candlestick: wick, body, open and close

The position sizing guide is most members' answer in guide form — and the thread's answers reveal the rest.

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