Risk Per Trade
Risk per trade is how much of your account you’re willing to lose on any single trade. This is your most important risk parameter.
Risk Per Trade Formula
Risk Amount = Account Balance × Risk %
Example:
Account: $10,000
Risk: 2%
Risk per trade = $10,000 × 0.02 = $200
Recommended Risk Levels
| Risk Level | Maximum Traders |
|---|---|
| 0.25% | Conservative / beginners |
| 0.5% | Conservative |
| 1% | Standard (recommended) |
| 2% | Aggressive |
| 3%+ | Very aggressive |
Recommendation: Start at 1%, max out at 2%.
Risk Per Trade Table
| Account | 0.5% | 1% | 2% | 3% |
|---|---|---|---|---|
| $1,000 | $5 | $10 | $20 | $30 |
| $2,500 | $12.50 | $25 | $50 | $75 |
| $5,000 | $25 | $50 | $100 | $150 |
| $10,000 | $50 | $100 | $200 | $300 |
| $25,000 | $125 | $250 | $500 | $750 |
| $50,000 | $250 | $500 | $1,000 | $1,500 |
| $100,000 | $500 | $1,000 | $2,000 | $3,000 |
Risk by Strategy Type
| Strategy | Suggested Risk | Rationale |
|---|---|---|
| Scalping | 0.25% | Many trades, small losers needed |
| Day Trading | 0.5-1% | Few trades, higher risk OK |
| Swing Trading | 1-2% | Hold longer, more risk |
| Position Trading | 2-3% | Low frequency, higher risk OK |
Psychological Impact
| Risk per Trade | Psychological Comfort | Trade Frequency |
|---|---|---|
| 0.25% | Very comfortable | 20-50/day |
| 0.5% | Comfortable | 10-20/day |
| 1% | Normal | 1-5/day |
| 2% | Stressful | 1-3/week |
| 3%+ | Very stressful | 1/month |
Rule: If stressed at current risk, lower it.
Common Mistakes
1. Risk Too High
Problem: Risking 5%+ per trade.
Result: Quick blow-up.
Fix: Never exceed 2%.
2. Different Sizes
Problem: Risk 1% one trade, 5% next.
Result: Inconsistent risk.
Fix: Stick to percentage.
3. No Calculation
Problem: Trading without risk amount.
Result: Unknown exposure.
Fix: Calculate before trade.
Key Takeaways
- Maximum 2% — Industry standard
- Calculate each trade — Before entering
- Match strategy — Frequency matches risk level
- Comfortable — Reduce if stressed
- Track — Monitor risk each trade
Related
stop-loss.md >>>
Never risk more than you can recover.