Glossary · Risk & money management
Risk per trade
The share of your account you lose if a trade hits its stop loss. Many traders use 0.5–2%.
In practice
At 1% risk, a $3,000 account loses $30 on a stopped-out trade. Ten losses in a row would leave about $2,710, which is painful but very recoverable.
Raising risk after a few wins. Streaks end, and the next losing run then hits a bigger position size.
Related terms
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Stop loss
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