Risk per trade and position size
You will learn to
- Choose a risk % and stick to it
- Calculate size from the stop
- See why this keeps you in the game
Decide the loss first
Before entering, decide how much of the account you will lose if the stop is hit. Most professionals use 0.25% to 1% per trade. The position size follows from the stop distance — never the other way round:
size = (account × risk %) ÷ |entry − stop|
Example: $10,000 account, 0.5% risk = $50. Entry $100, stop $98: $50 ÷ $2 = 25 units ($2,500 position). With a wider stop at $95 you buy only 10 units — the loss at the stop is still $50.
Why small
| Risk per trade | After 10 straight losses | Gain needed to recover |
|---|---|---|
| 0.5% | −4.9% | +5.1% |
| 2% | −18% | +22% |
| 5% | −40% | +67% |
| 10% | −65% | +187% |
Ten losses in a row happen to every strategy eventually. At small risk they are an inconvenience; at large risk they are the end.
The Trade ticket does the sum for you: set the risk %, place the stop, and it shows the size and exactly what you lose at the stop and make at the target, fees included. Guardrails can cap risk per trade.
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Check yourself
1. $5,000 account, 1% risk, entry 50, stop 48. Size?
- 25 units ✓
- 100 units
- 50 units
$50 risk ÷ $2 per unit = 25 units.
2. Raising leverage with the same size and stop changes your loss at the stop by…
- Doubling it
- Nothing ✓
- Halving it
Loss = size × distance.
3. After 10 losses at 5% risk the account is down about…
- 50%
- 40% ✓
- 10%
0.95^10 ≈ 0.60.
Terms in this lesson
- Position size
- (account × risk %) ÷ distance to the stop.
- Risk per trade
- The % of the account lost if the stop is hit.
Practise it on real charts. In the app, this lesson comes with real examples (reveal what happened next), a graded drill and the track test. Open the Academy in NexusCore — free →