Forex Trading Guidelines › Guideline 1
How Much Should I Risk Per Forex Trade?
The Exact Risk Money by Account Size
| Account | 0.5% (conservative) | 1% (standard) | 2% (maximum) |
|---|---|---|---|
| $500 | $2.50 | $5.00 | $10.00 |
| $1,000 | $5.00 | $10.00 | $20.00 |
| $2,000 | $10.00 | $20.00 | $40.00 |
| $5,000 | $25.00 | $50.00 | $100.00 |
| $10,000 | $50.00 | $100.00 | $200.00 |
| $25,000 | $125.00 | $250.00 | $500.00 |
| $50,000 | $250.00 | $500.00 | $1,000.00 |
| $100,000 | $500.00 | $1,000.00 | $2,000.00 |
Why 2% Is the Ceiling: The Math of Surviving
The risk % is not about limiting how much you lose per trade — it is about how many losses you can survive in a row. At 2% per trade, 10 consecutive losses cost ~18% of the account (compounding), which is survivable. At 5%, the same streak costs ~40%. At 10%, it costs ~65%. At 20%, 10 losses = -89%: the account is dead. Since losing streaks of 5-10 trades are normal for a positive-expectancy system, the risk % must make streaks survivable — that is the entire purpose of Guideline 1.
One more number: your blow-up distance. At 1% risk you can lose 100 trades in a row before the account hits zero (mathematically, ~63% at 1% x 100 compounding — survivable in practice). At 5%, just 20 losing trades ends you. The rulebook generator computes your exact blow-up distance.
Risk % Becomes Lot Size (The Only Math You Need)
Your risk % sets the dollars; the stop distance and pip value convert it into lots (Guideline 16):
$10,000 account, 1% risk, 50-pip stop, EURUSD ($10/pip/lot):
Lots = $100 / (50 x $10) = 0.20 lots
| Account (1% risk) | Risk $ | Stop 20 pips | Stop 50 pips | Stop 100 pips |
|---|---|---|---|---|
| $1,000 | $10 | 0.05 | 0.02 | 0.01 |
| $5,000 | $50 | 0.25 | 0.10 | 0.05 |
| $10,000 | $100 | 0.50 | 0.20 | 0.10 |
| $50,000 | $500 | 2.50 | 1.00 | 0.50 |
Apply the Rule Automatically
FAQ
Is risking 5% per trade too much?
Yes. At 5% per trade, a normal 10-trade losing streak destroys roughly 40% of the account and requires a 67% recovery. The professional ceiling is 2% per trade; 0.5-1% is standard.
Should I risk more on high-probability setups?
No — risk the same % on every trade. If a setup is truly high-probability, it wins more often; that already shows up in your expectancy. Raising risk on "sure things" is how sure things become blow-ups.
Is the 2% rule enough to protect my account?
Per-trade 2% needs the rest of the rulebook around it: daily and weekly caps (Guideline 3), stop losses (Guideline 2) and no martingale (Guideline 14). Together they define the full loss envelope: 2% per trade, 3% open, 5% daily, 7% weekly.
Can I risk 1% with a $100 account?
Yes, but only with micro lots (0.01): a 20-pip stop at 0.01 lots costs $2 = 2% of $100. At 0.01 lots your stop is capped by the broker minimum size — if the required risk exceeds 2%, the trade is off-limits until the account grows.
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