Module 4 — Risk & position sizing
Risk per trade
6 minute read
In plain English
Risk per trade is the amount you accept losing if you are wrong — not the amount you invest.
Why it matters
Deciding this before you enter is what converts gambling into a process.
Example
On a $2,000 account, 1% risk is $20. That is your maximum loss, not your position size.
Try this
Use the position size calculator in Trading Maths with your real account balance.
Common mistake
Thinking of risk as 'how much I put in'.
What this does not mean
A small risk per trade does not make losses impossible, only survivable.
Educational content only. Not financial advice.