Separate tolerance from capacity
Risk tolerance is how comfortable you feel with uncertainty; risk capacity is how much loss your finances can actually absorb. The lower of the two should guide exposure, time horizon and product choice.
Control concentration
Position size and diversification can reduce dependence on one company, sector or event, but they cannot eliminate loss. Keep near-term needs in suitable liquid assets rather than relying on a forced market sale.
Treat leverage with particular care
Derivatives and borrowed exposure can magnify losses and may require funds at short notice. Predefine exit and review conditions, but understand that stop orders and risk controls do not guarantee an execution price.