The concept
The maximum amount you're willing to lose on one trade, often expressed as a percent of the account.
Why it matters
Small fixed risk lets you survive long losing streaks.
How markets interpret it
Common educational examples use 0.5–2% per trade.
Key takeaways
- Fix risk per trade in advance.
- Never raise it to recover losses.
Knowledge check
Risking 1% of $5,000 is…