What is Risk per trade?
Bitta savdodagi risk
In short
The amount you accept losing if the stop is hit, as a % of the account. Many traders use 0.5–2%, often 1%.
Also known as: 1% rule
Risk per trade is the amount you agree in advance to lose if your stop-loss is hit, expressed as a percentage of the account. Many traders keep it at 0.5–2%, most often 1% (the "1% rule"). On a $10,000 account, 1% means at most $100 per trade.
This number directly sets your position size: risk amount ÷ stop distance = number of shares. In other words, the risk percentage is the main dial you control; the share count follows from it.
Why a small percentage
Every strategy has losing streaks. Ten losses in a row cost about 9.6% of the account at 1% risk, but more than 40% at 5% risk. Losses and recoveries are asymmetric: after −40% you need +67% to get back (see drawdown). Small risk isn't timidity; it's how you stay in the game.
How to choose
For a beginner, or a strategy that isn't proven yet, 0.5–1% is sensible. Don't change the percentage often: raising it after a losing streak to "win it back" is a classic sign of revenge trading. If you hold several positions at once, cap the total open risk as well.
At 1% about 90% of the account remains. At 10% about 35% remains and you need ~187% to recover.
Account $10,000, same results: 9 wins (+2R), 11 losses (−1R), +7R in total. At 1% risk the low point is $9,507 (−4.9%), at 2% $9,029 (−9.7%), at 5% $7,682 (−23.2%). Final: +7%, +14%, +34.1%. That deepest point is exactly where many people abandon a system.
Example
Illustrative numbers: account $10,000, 1% risk = $100. Entry $50, stop $45 → $5 distance → 100 ÷ 5 = 20 shares.
If 10 losses come in a row (each calculated from the remaining balance):
- 1% risk: 0.99¹⁰ ≈ 0.904 → account −9.6%, needs +10.6% to recover;
- 2% risk: 0.98¹⁰ ≈ 0.817 → −18.3%, needs +22.4%;
- 5% risk: 0.95¹⁰ ≈ 0.599 → −40.1%, needs +67%.
To work out the size: position size calculator.
Mistakes and tips
Set risk as a percentage and calculate it from the account's current value before each trade — if the account shrinks, the dollar risk shrinks automatically.
"1% risk" means nothing without a stop: without one, your real risk is the full value of the position.
Also cap your total loss for the day (daily loss limit); otherwise one bad day can stack up five or six 1% losses.
Calculate it
Frequently asked questions
- What is the 1% rule in trading?
- A rule not to lose more than 1% of the account on any single trade if the stop is hit. It does not mean the position is 1% of the account — the position can be much larger.
- Isn't 1% risk too small for a small account?
- It looks small in dollars, but the goal while learning is to keep the account alive, not to get rich quickly. Building the habit of thinking in percentages matters even on a small account.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
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