Trading questions
How much should I risk per trade?
Maxwell Norman · October 13, 2026 · 4 min read
Most traders do best between 0.5% and 2% of the account per trade, fixed, sized from the stop. At a 45% win rate a run of 6 losses in 100 trades is more likely than not, and 10 has at least a 1-in-10 chance. At 1% risk that run of 10 costs about 9.6% of the account; at 3% it costs about 26%.
Risk is the amount you lose if the stop is hit, not the size of the position. On a $25,000 account, risking 1% means losing $250 when you are wrong. Buy at $100 with a stop at $95 and each share risks $5, so the position is 50 shares. Move the stop to $98.50 on a $50 stock and the same $250 buys 166 shares.
Why the number is small
Losing streaks are longer than they feel. At a 45% win rate over 100 trades, a run of 6 losses in a row is more likely than not, and a run of 10 has at least a 1-in-10 chance. Those figures come from exact run-length arithmetic, not a simulation.
At 1% risk, ten losses in a row costs about 9.6% of the account. At 3%, it costs about 26%.
The first is a rough month. The second takes months of good trading to recover, and it is the kind of drawdown that makes traders change a working strategy at the worst moment.
How to pick your number
Start from the drawdown you can live with. If a 10% drawdown is your limit and your win rate is around 45%, the likely losing streak over 100 trades fits inside it at about 1.7% risk per trade. If 20% is your limit, the figure is about 3.6%.
Then keep it fixed. The trader who risks 1% on most trades and 4% after a loss is not trading a 1% plan. Size from the stop on every trade, and round down so the stop never costs more than planned.
Both free Travise calculators do this arithmetic with no account: the position size calculator turns your risk and stop into a share count, and the losing streak calculator shows what a normal run of losses costs at the size you trade.
How do I turn a risk percent into a share count?
Divide the money you will risk by the distance from entry to stop. On a $25,000 account at 1%, that is $250. Entry $100 and stop $95 is $5 a share, so 50 shares. Always round down, so the stop never costs more than planned.