Risk management: the only strategy that keeps you in the game

Ruin is not losing all your money — ruin is drawdown so severe that psychological recovery becomes impossible. Most traders blow up not because their edge is negative but because their position sizing is wrong. The Kelly Criterion gives the mathematically optimal bet size: f = (bp - q) / b, where b is the odds received, p is the probability of winning, and q is the probability of losing. Most professional traders use half-Kelly to account for edge uncertainty.