Risk per trade is the maximum dollar loss accepted on a single trade if the stop is hit, normally expressed as a percent of account equity. Industry consensus for retail discretionary traders is 1–2% per trade; systematic / portfolio approaches often size lower (0.25–0.5%) since correlated positions stack risk.
Risk per trade is the input to position-size math: with risk_per_trade fixed, the position size adjusts inversely to stop distance — wider stops mean smaller positions, tighter stops mean larger ones. This keeps the dollar pain constant.
Compound math matters: at 2% risk per trade with 50% win rate and 1:1 RR, a string of five losses leaves you at 0.98^5 ≈ 90.4% of starting equity. At 10% risk per trade, the same streak takes you to 59.0%.
Formula
risk_per_trade$ = equity · risk_pct
Example
Equity 10,000 USDT, risk_pct 1%. Risk per trade = 100 USDT — that is the max loss if today's stop hits.
How Noon Barbari uses Risk per trade
Every concept here is implemented in the platform. Open the relevant docs or tool to see it in action.
Position size calculator →Related terms
- Risk
Position size
How many units of an asset a trade holds — derived from risk budget and stop distance.
- Risk
Stop loss
A pre-committed exit level that caps the maximum loss on a trade.
- Risk
Drawdown
Peak-to-trough decline in equity, expressed as a percent of the prior peak.
- Risk
Leverage
Position notional divided by posted margin. 10× leverage = 10× the equity exposure.