How much to risk per trade: risk management without myths
A good system, a quiet week — and a streak of stops after which two thirds of the account are left. What breaks here is not the strategy but the size of the risk. How much to risk per trade is decided before choosing a strategy — and here is how to calculate it.
Risk is not position size
Risk per trade is the amount you lose if the stop is hit. A 10,000 USDT position with a stop 1% from entry risks 100 USDT. A 2,000 position with a 10% stop risks 200. The second is smaller but more dangerous.
So the right order is this: first decide how much you're willing to lose, then place the stop on the chart, and only then calculate the size. Not the other way round.
First — how much you're willing to lose, then the stop on the chart, and only then the size.
The 1–2% rule
A common guideline is to risk 1–2% of the deposit per trade. The point isn't the magic of the number but the arithmetic of streaks. See what's left of the account after ten losses in a row:
| Risk per trade | After 10 losses in a row | Needed to recover |
|---|---|---|
| 1% | −9.6% | +10.6% |
| 2% | −18.3% | +22.4% |
| 5% | −40.1% | +67.0% |
| 10% | −65.1% | +186.8% |
Risk is calculated from the current deposit, so losses don't add up linearly. The key column is the last one: after a deep drawdown you need to earn much more than you lost. Ten stops in a row at a 40% win rate isn't a disaster — it's a rare but expected event.
After a drawdown you need to earn more than you lost: −40% only comes back through +67%.
How to choose your percentage
- Look at your longest losing streak in the journal and multiply it by one and a half — such a streak will happen again. Your risk should survive it without panic.
- Take win rate into account. At 30% winners, streaks are longer than at 60% — keep risk per trade lower.
- New strategy — half risk until it has at least 30 trades.
Daily and weekly limits
Risk per trade protects against one mistake. Limits protect against a series of mistakes on a bad day: a daily loss limit (say, 3 risks), a limit on the number of trades and a stop after N losses in a row. They are set in advance, with a cool head — at the moment they're needed, decisions are already made under pressure.
Where risk is broken most often
- Moving the stop further away “so it doesn't get hit” — and the actual loss turns out one and a half to two times the plan.
- Increasing size after a loss to get the money back faster.
- Calculating risk without leverage: on futures, a position at 20x leverage with a 3% stop is 60% of the position's margin.
Cheat sheet: risk before entry
One button adds these points to your pre-entry checklist — it will appear in every trade in the journal.
- Trade risk within the limitFor example, 1–2% of the deposit — by your rules.
- Stop placed on the chart before entryWhere the trade idea is broken.
- Size calculated from riskRisk ÷ distance to stop, not “whatever is in the account”.
- On futures, the stop comes before liquidationI calculate risk with leverage.
- Daily loss limit not hitIf it is — no more trades today.
How to keep it under control
The position size calculator works out the size for a given risk. And Ordo Trade watches execution: it shows trades closed worse than your own stop and risk growing after losses, and sends a Telegram message as soon as the daily limit is hit or you reach the losing streak after which you decided to stop.
In short: frequently asked questions
What percentage of the deposit should I risk per trade?
A common guideline is 1–2% of the deposit. The exact value depends on your win rate and your longest losing streak: the risk should survive such a streak with a margin.
How is risk per trade different from position size?
Risk is the amount you lose if the stop is hit. A large position with a close stop can risk less than a small one with a distant stop.
Why do I need a daily loss limit?
It protects against a series of decisions made under pressure on a bad day. The limit is set in advance, and once it is reached, trading stops.
