Risk Management
Risk Per Trade
The percentage or dollar amount risked on a single trade.
Full Definition
Risk per trade is the maximum amount you're willing to lose on any single trade, typically expressed as a percentage of your account. Most professional traders risk 0.5-2% per trade. This ensures a series of losses won't significantly damage your account.
Example
With a $10,000 account and 1% risk per trade, you risk a maximum of $100 on each trade. This means you could lose 50 consecutive trades before depleting half your account.
Related Terms
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