How much to risk on one trade

Risk per trade is the share of your account you lose if your stop is hit. It matters more than your strategy, your indicators or your win rate, because it decides whether you survive long enough for any of those to work.

Here's what ten losses in a row does at different risk levels:

Ten losses in a row sounds unlikely. It isn't, over hundreds of trades. And the deeper the hole, the harder the climb out: a 40% drawdown needs a 67% gain just to get back to even.

Working out your position size

1. Decide your risk, for example 1% of a $10,000 account, which is $100.
2. Measure your stop distance, for example $5.50 on gold.
3. Work out the loss per lot at that stop. One lot of gold is usually 100 ounces, so $5.50 × 100 = $550.
4. Divide: $100 ÷ $550 = 0.18 lots, rounded down.

The checker does this for you, and it always rounds down so you never risk more than you planned.

Prop accounts

Prop firms add a daily loss limit, often around 5%, and a maximum drawdown, often around 10%. At 1% risk you can lose four trades in a day and still have room. At 2.5% risk, two losses put you at the edge.

Key points

• Most experienced traders risk 1% or less per trade.
• Set the risk first, then let the stop distance decide the lot size.
• Smaller risk means a longer runway to learn.

Try it in the checker

Change "Risk per trade" from 1% to 3% and watch the account risk factor turn against you.