Risk per trade

Risk per trade is the amount you lose if the stop loss is hit, usually set as a percentage of the account.

It comes from three things together: the account size, the distance to the stop, and the position size. Fix the first two and the third is arithmetic.

It is the one number a trader fully controls before the market opens.

Related terms

Stop lossLotDrawdown

A definition, not financial advice. Trading carries a risk of loss.

All 64 terms