Risk per Trade
Risk per trade is the fraction of trading capital you stand to lose on a single position if its stop is hit, expressed as a percentage or a rupee amount.
Risk per trade is the fraction of capital a single position loses if its stop is hit — measured by the stop distance, never by margin or notional. The widely taught 1–2% figure is a rule of thumb for surviving streaks: losses compound as (1 − f)ⁿ, so ten straight losses at 2% cost ~18% but at 10% cost ~65%. Pair the per-trade fraction with a portfolio-heat cap, because correlated trades aggregate. The full treatment — the math, the streak tables and the worked examples — lives at its canonical home on RiskManagementGyan, the network's risk authority.
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Risk per trade
Canonical explainer on RiskManagementGyan.
Position sizing
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Risk of ruin
Canonical explainer on RiskManagementGyan.
Related on AlgoTradeGyan: Position Sizing · Risk of Ruin · Maximum Drawdown · Portfolio Heat · Stop-Loss Concepts · Capital Allocation
Published 10 July 2026 · Updated 17 July 2026. This page is a summary; the canonical, maintained treatment of Risk per trade lives on RiskManagementGyan. Educational content only — not investment advice.