The learner can define risk per trade, calculate position size from a stop distance, compare reward to risk, understand drawdowns and losing streaks, consider portfolio exposure, explain why capital preservation matters, use predetermined risk rules, and maintain a risk journal without treating any figure as a personal recommendation.
12 teaching sectionsExamples and misconceptionsInteractive version available
LESSON 01
Risk per trade is the cost of being wrong
Define risk per trade clearly.
Risk per trade is the planned loss used to size and evaluate a position if the intended exit occurs near the chosen invalidation level. It is not the total value of the position. Actual loss can exceed the plan because of gaps, slippage, fees or an order that does not execute as expected.