The amount of money or percentage of account equity you put at risk on a single trade — usually 1-2% for serious traders.
Risk per trade is the maximum you're willing to lose on any single position. It's expressed as a percentage of account equity (most common) or as a dollar amount. The professional standard is 1-2% per trade. Most retail traders blow up because they risk 5%, 10%, or more — accidentally turning a normal losing streak into account death.
The math is simple. At 1% risk per trade, you'd need 100 consecutive losers to wipe out your account (which is statistically nearly impossible for any strategy with positive expectancy). At 5% risk per trade, you only need 20 losers in a row. At 10%, just 10 losers. The smaller the risk, the more survivable the bad streaks.
Risk per trade also determines position size. Once you've decided your risk dollar amount and your stop loss distance, the lot size is forced — there's only one math answer for each setup.
Famed trader Mark Douglas (Trading in the Zone) recommended risking no more than 1% of account equity per trade. He attributed his survival in 30+ years of trading to that single rule.
Frequently asked about risk per trade
What is a risk per trade in trading?+
The amount of money or percentage of account equity you put at risk on a single trade — usually 1-2% for serious traders.
When will I see risk per trade used in real trading?+
In every serious trading plan and every prop firm rulebook. Risk per trade is the most critical input to position sizing.
What is the most common mistake traders make with risk per trade?+
Thinking that risking less per trade means making less money. With positive expectancy, risking less just makes you survive longer to compound. Compounding does the heavy lifting.
What do experienced traders know about risk per trade that beginners don't?+
Start at 0.5% risk per trade for the first 100 live trades. Once you've proven your edge in real conditions, scale to 1%. Anything above 2% per trade is gambling, not trading.
Read the lesson here. Mark the chart on TradingView. Compare brokers with the checklist.
TradingView is the chart workspace most learners already recognize: watchlists, alerts, drawings, and clean multi-market charts. Broker research stays methodology-first: jurisdiction, costs, platform, withdrawals, and risk before any account decision.