The Risk Management Policy Document

## Writing Your Risk Management Policy A risk management policy is a written document that defines your rules for bankroll management, stop-losses, stake sizing, and risk review. Writing it down commits you to it; sharing it with an accountability partner enforces it. ## Essential Sections **1. Bankroll Definition** - Total bankroll: £X - Operational allocation: Y% - Reserve: Z% - Minimum bankroll to continue operating: £M **2. Staking Rules** - Staking method: (flat / percentage / fractional Kelly) - Standard stake: N% of operational bankroll - Maximum stake per bet: N% - Maximum correlated exposure per event: N% - Market-specific caps: (list by market type) **3. Stop-Loss Rules** - Session stop-loss: −X units - Weekly stop-loss: −Y units - Drawdown stop-loss: −Z units from peak - Response on trigger: (pause, review, resume procedure) **4. Review Schedule** - Weekly: balance reconciliation - Monthly: performance review - Quarterly: model calibration, edge validation - Annual: full strategy review, policy update **5. Account Management** - Number of active accounts maintained: N+ - Float distribution target: X% per account - Restriction protocol: defined responses to account restrictions ## The Living Document The policy is not set once and forgotten. Review it at each quarterly meeting. Update it when market conditions, edge estimates, or personal circumstances change. A policy that reflects current reality is useful. One that reflects outdated assumptions is worse than having no policy.