How to calculate risk per trade
Risk per trade is the amount you are prepared to lose if a trade idea fails. Define it before entering a position.
Start with a fixed percentage
Choose the portion of your balance you are willing to risk on one trade. Many traders use 0.5–2%, but the right value depends on the strategy and asset volatility.
Build the position from the stop-loss
First determine where the trade idea is invalid, then measure the distance from entry to the stop. Position size should adapt to that distance, not the other way around.
Allow for real execution
Fees, spread and slippage can increase a loss. Leave a small buffer for volatile conditions, news events or thin liquidity.