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Risk per trade
In one line: The share of your account you are willing to lose on one trade.
Evidence
Strength: no study for "1%" itself. We found no study that works out 1% specifically. It is a habit among practitioners. The research behind it is fixed-fraction sizing: Kelly (1956) showed that betting a fixed share of your current money, chosen to grow wealth fastest over time, gives the fastest long-run growth. Betting more than that share raises the risk of ruin. The right share depends on your edge and odds.
Strength: no study for "1%" itself. We found no study that works out 1% specifically. It is a habit among practitioners. The research behind it is fixed-fraction sizing: Kelly (1956) showed that betting a fixed share of your current money, chosen to grow wealth fastest over time, gives the fastest long-run growth. Betting more than that share raises the risk of ruin. The right share depends on your edge and odds.
More videos on this (3)
- What to Do After a Loss: Wait, Stop, Don't Raise Risk · T-WYS
- What to Do When Three Trades Are One Risk: Pick One Setup · T-WYS
- Trading Psychology Starts With Risk Management · Stick Trader · external
Many practitioners risk about 1–2% of the account per trade. That is a common habit among traders, not a research-backed rule. We found no peer-reviewed study that proves a 'right' percentage.
Why traders like small numbers: losing streaks happen. Ten losses at 1% each leaves about 90% of the account. Ten losses at 10% each leaves about 35%. (Calculated: 0.99¹⁰ and 0.9¹⁰.)
See Drawdown and Risk of ruin.
Example (illustration, no stamp)
Ten losses in a row: at 1% risk ≈ 90.4% left · at 2% ≈ 81.7% · at 10% ≈ 34.9%.
Ten losses in a row: at 1% risk ≈ 90.4% left · at 2% ≈ 81.7% · at 10% ≈ 34.9%.
More from T-WYS
What to Do After a Loss: Wait, Stop, Don't Raise Risk
T-WYS · 6:18 · open on YouTube
T-WYS · 6:18 · open on YouTube
What to Do When Three Trades Are One Risk: Pick One Setup
T-WYS · 7:04 · open on YouTube
T-WYS · 7:04 · open on YouTube
Further viewing
External videos are for viewing only: we don't use them as a factual source.
External video, for viewing onlyTrading Psychology Starts With Risk Management
Stick Trader · open on YouTube
Stick Trader · open on YouTube
Related
Sources & studies
Last checked: 2026-11-04 · Educational, not financial advice.
Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.