<p><strong>Risk Per Trade</strong> is the percentage of a trading account that a trader is willing to lose on a single trade. It is a core element of risk management and is directly linked to <strong>position-sizing</strong>, which determines how many lots or contracts to trade based on that risk amount.</p>

<h2>How It Works</h2>
<p>First, decide the risk percentage, for example 1 % of the account equity. Multiply the account balance by this percentage to get the monetary risk amount.</p>
<p>Risk amount = Account balance × Risk %</p>
<p>Next, set a stop‑loss level in pips (or points) for the trade. Knowing the pip value for the chosen instrument and lot size, calculate the position size that matches the risk amount.</p>
<p>Position size = Risk amount ÷ (Stop‑loss in pips × Pip value)</p>
<p>Many traders perform this calculation on the MetaTrader 5 platform provided by STB, where the trade‑ticket window shows the resulting lot size instantly.</p>

<h2>Why It Matters for Traders</h2>
<p>Limiting risk per trade protects the account from large drawdowns caused by a single losing trade. It promotes consistency, because each trade has the same expected loss regardless of market conditions. Over a series of trades, a fixed risk percentage helps preserve capital and allows the strategy’s edge to work over the long term.</p>
<p>Without a defined risk per trade, traders may overleverage, leading to rapid equity loss and emotional decision‑making.</p>

<h2>Example</h2>
<p>A trader has a $10,000 account and chooses to risk 1 % per trade.</p>
<ul>
<li>Risk amount = $10,000 × 0.01 = $100</li>
<li>The trader sets a stop‑loss of 50 pips on EUR/USD.</li>
<li>For a standard lot, one pip equals $10.</li>
<li>Position size = $100 ÷ (50 × $10) = 0.2 lot</li>
<li>The trader opens a 0.2‑lot position; if the stop‑loss is hit, the loss is approximately $100, exactly 1 % of the account.</li>
</ul>

<h2>Key Takeaways</h2>
<ul>
<li>Risk Per Trade defines the maximum monetary loss acceptable on any single trade.</li>
<li>It is calculated using account equity, chosen risk percentage, stop‑loss distance, and pip value.</li>
<li>Consistent application preserves capital and supports long‑term profitability.</li>
<li>Position‑sizing tools in platforms like MetaTrader 5 automate the calculation.</li>
</ul>