That means if you have a £5,000 account, your maximum risk per trade is £50. Why? Because no matter how good your strategy is, losses will happen. You will have losing days. And losing streaks. That’s just part of the game. If you risk 10% of your account per trade, it only takes a few losses in a row to cripple your capital — and your confidence. Risking 1% keeps you alive long enough to let the edge play out. How to Calculate Position Size Let’s break it down step by step. Let’s say: - Your account size = £10,000 - You want to risk 1% = £100 - The distance from your entry to your stop loss = 20 pips Here’s the formula: Position Size = Risk Amount divided by Stop Size
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