Answer Capsule: Never risk more than 1% of your account per trade. The 1% rule gives you 69 consecutive losses before losing 50% of your account. At 10% risk, just 7 losses. Position sizing is survival math.
Never risk more than 1% of your account per trade. The 1% rule gives you 69 consecutive losses before losing 50% of your account. At 10% risk, just 7 losses. Position sizing is survival math.
The difference between gamblers and professional traders is not entry strategy. It is position sizing. Here is how to size your trades properly.
You can have a 70% win rate and still blow your account. How? By risking too much on the 30% of trades you lose. Position sizing is the math that keeps you in the game long enough for your edge to play out.
A trader with a 40% win rate and proper position sizing will outperform a trader with 70% win rate and terrible sizing. Every. Single. Time.
Never risk more than 1% of your account on a single trade. If you have a $10,000 account, your maximum loss per trade is $100.
Formula: Lot Size = (Account × Risk%) / (Stop Loss in Pips × Pip Value)
Example: $10,000 account, 1% risk, 20 pip stop on EURUSD (pip value = $10/lot). Risk amount = $100. Lot size = 100 / (20 × 10) = 0.5 lots.
| Method | Risk/Trade | Best For |
|---|---|---|
| Fixed Fractional (1%) | 1% of account | Beginners, conservative traders |
| Fixed Dollar | $X per trade | Simple, but doesn't scale with account |
| Kelly Criterion | f* = (bp-q)/b | Advanced, maximizes growth rate |
| Half-Kelly | Kelly ÷ 2 | Most professionals use this |
| Volatility-Based | ATR × multiplier | Adaptive to market conditions |
The Kelly formula tells you the mathematically optimal fraction of your account to risk: f* = (bp - q) / b where b = win/loss ratio, p = win probability, q = loss probability.
If you win 45% of trades with 2:1 R:R: f* = (2×0.45 - 0.55)/2 = 17.5%. Kelly says risk 17.5% — but that is ridiculously aggressive. Most pros use Half-Kelly (8.75%) or Quarter-Kelly (4.4%).
Fixed pip stops make no sense when volatility changes. A 20-pip stop on a calm day might be 2x ATR. The same stop on NFP day might be 0.3x ATR. Use ATR to size your stops based on current market conditions.
Volatility-adjusted formula: Lot Size = (Account × Risk%) / (Stop in ATR Multiples × ATR Value × Pip Value)
Risk of Ruin (RoR) is the probability you blow your entire account. At 1% risk with a 45% win rate and 2:1 R:R, your RoR is essentially 0%. At 10% risk with the same stats, RoR jumps to over 50%.
This is why casinos always win — they risk tiny fractions of their bankroll on thousands of independent bets. Be the casino, not the gambler.
Built-in position size calculator with live price data. Set your risk parameters and the terminal tells you exactly how many lots.
Abrir Terminal GFIL Calculadora de Tamano de Posicion Calculadora de Riesgo de Ruina