Shadowing Practice: Risk Management: The Math Behind Profitable Trading | FTMO - Learn English Speaking with Video
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52 sentences
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Many beginners spend months jumping from one trading strategy to another, thinking that a perfect entry is the missing piece to profitability.
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But the truth is, even the best strategy in the world will lose money if you don't manage your risk properly.
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Proper risk management is what actually separates professionals from amateurs.
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In this video, we're going to walk through the exact mathematical framework you need to protect your simulated capital.
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The first major hurdle we need to look at is undercapitalization.
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Because many brokers allow you to start with just 50 or 100 dollars.
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A lot of traders come in with a small account and think they can double it overnight.
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To do that, they are forced to over leverage their accounts and risk way too much.
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One short losing streak and the whole account is gone.
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And that's exactly why FTMO introduced a unique prop trading model.
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We provide a simulated environment with an initial balance up to 200 000 dollars.
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With larger demo accounts, you can keep your risk per trade very small while still targeting meaningful gains.
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So once you have access to the simulated capital, how much should you actually risk per trade?
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Most traditional textbooks suggest risking 2% per trade.
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But look at this.
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If you trade an FTMO account and hit just five consecutive losses at 2% risk of your initial balance,
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you are down 10%, which reaches the max loss limit in the two-step FTMO challenge.
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That is why at FTMO we highly recommend keeping your risk between 0.5% and 1.5% per trade.
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It gives you the breathing room to survive drawdowns without losing the account.
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However, where you sit within that range should differ based on your strategy.
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Let's say you're a scalper taking 5 trades a day.
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Risking 1% per trade means one bad afternoon could easily breach your max daily loss limit.
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For scalpers, 0.25% to 0.5% is much safer.
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On the On the other hand, if you're a swing trader taking one or two setups a week, risking 1% or 1.5% is perfectly fine.
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The key is structuring your position sizes to minimize the risk of breaching the trading objectives.
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Now even with perfect risk sizing we have to talk about losing streams.
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We all hate them but they are inevitable.
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Just look at the numbers here.
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Even
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if you have a solid trading strategy with 60% win rate there is still a 70% chance you'll face four consecutive losses.
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But does that mean your trading strategy is broken?
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Absolutely not.
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It just means you must build a trading plan
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that can sustain 9 or 10 consecutive losses without reaching the FTML max loss limit.
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The piece of the puzzle that makes surviving those drawdowns possible is your reward to risk ratio.
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For example, if you risk $100 to make $150, that's 1.5 to 1 ratio.
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As you can see in this picture, pairing this with 50% win rate makes you consistently profitable.
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Now, maintaining a 50% win rate means you already have a very significant edge.
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But remember, there is no universal holy grail in trading.
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Every trader is different.
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Some prefer a high win rate with lower risk to roll ratio.
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Others are highly profitable with win rate of just 25% or 30% simply because their winning trades are massive.
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Ultimately, you have to find the mathematical edge that fits your personality.
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Finally, you have to account for the unexpected.
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news releases, weakened gaps or emotional tilt can happen at any time.
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While FTMO does not strictly require you to use a stop loss, trading without one is playing with fire.
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At FTMO we have the max daily loss limit
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but understand this it is not a safety net for you to rely on.
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It is a strict limit.
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If you hit it you fail the evaluation process or lose your FTMO account.
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Your entire risk management plan must be designed to ensure you never even come close to hitting it.
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Protect your account, master your discipline and we'll see you soon in the markets!
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Vocabulary and speaking notes for this lesson
This C1 speaking lesson is built on the video “Risk Management: The Math Behind Profitable Trading”. The speaker keeps coming back to these words: risk, account, trading, trade, Ftmo. This video has 52 sentences and 654 words to shadow. The speech runs for 3:45. The speaker talks at a natural 174 words per minute, close to everyday conversation. 83% of the words are among the 3,000 most common in English; the rest is worth studying before you start.
Key vocabulary in this video
The 15 most advanced words in the video, with pronunciation and meaning:
| Word | Pronunciation | Meaning |
|---|---|---|
| simulate verb | /ˈsɪm.jə.lət/ | To model, replicate, duplicate the behavior, appearance or properties of. |
| trader noun | /ˈtɹeɪdɚ/ | One who earns a living by trading goods or securities. |
| drawdown noun | The act of reduction or depletion (including through withdrawal or utilization). | |
| scalper noun | /ˈskælpɚ/ | One who scalps, or removes the scalp of another. |
| profitable adjective | /ˈpɹɑ.fɪ.tə.bl̩/ | Producing a profit. |
| mathematical adjective | /ˌmæθ(.ə)ˈmæt.ɪ.kəl/ | Of, or relating to mathematics. |
| hurdle noun | /ˈhɝd(ə)l/ | An artificial barrier, variously constructed, over which athletes or horses jump in a race. |
| profitability noun | /ˌpɹɑ.fɪ.təˈbɪl.ɪ.ti/ | The state or quality of being profitable; capacity to make a profit. |
| undercapitalization noun | Insufficient capitalization | |
| weaken verb | /ˈwikən/ | To make weaker or less strong. |
| beginner noun | /bəˈɡɪnɚ/ | Someone who is just starting at something, or has only recently started. |
| tilt verb | /tɪlt/ | To slope or incline (something); to slant. |
| textbook noun | /ˈtɛkst.bʊk/ | A coursebook, a formal manual of instruction in a specific subject, especially one for use in schools or colleges. |
| prop noun | /pɹɑp/ | An object placed against or under another, to support it; anything that supports. |
| minimize verb | /ˈmɪn.ɪˌmaɪz/ | To make (something) smaller or as small as possible; shrink; reduce. |
Phrasal verbs you will hear
| Word | Meaning |
|---|---|
| walk through verb | To explain (something) to (someone), step by step. |
Pronunciation to watch
The speaker uses 6 contractions and reduced forms, such as you're, don't, we'll. Say them the short way, as you hear them.
- Long words — get the stress right: mathematical /ˌmæθ(.ə)ˈmæt.ɪ.kəl/, profitability /ˌpɹɑ.fɪ.təˈbɪl.ɪ.ti/, inevitable /ɪˈnɛvɪtəbəl/
How to practise with this video
- Listen to the whole video once without speaking and note the words you do not know.
- Start at 0.75× speed, shadow it sentence by sentence, then go back to normal speed once it feels easy.
- Record yourself and compare with the original, paying attention to words like simulate, trader, drawdown.
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.