The Risk-Per-Trade Rule
The three tiers
Beginner (fewer than 6 months of consistent tracked study): 1% of account per trade. Intermediate (6–18 months, positive track record): 1.5%. Experienced (18+ months, consistent profitable study): 2%. These are maximums — you can always risk less. The tier should reflect YOUR actual track record, not your confidence on any given day.
Why small percentages
Losing streaks are normal in any method. Risking 1% per trade, even ten consecutive losses only reduce the account by ~10% — a survivable drawdown. Risking 5% per trade, ten losses destroy 40% of the account and break the emotional ability to keep following the rules.
Quality over quantity
The goal is approximately 8–10 high-quality trades per month, not 50 small ones. The small risk percentage combined with strict selectivity is what makes a method survivable and learnable over time.
Worked example
Account: ₹2,00,000. Beginner 1% risk = ₹2,000 per trade. That ₹2,000 goes into the position-sizing formula to determine quantity. It never changes trade-by-trade — it only changes when the tier graduation criteria are met.
Practice checklist
- Determine your tier: beginner 1%, intermediate 1.5%, experienced 2%
- Risk ₹ = Account × risk %
- Use that fixed ₹ figure in every position-sizing calculation
- Aim for 8–10 quality setups per month, not volume
- Never raise risk after a loss to 'recover'
Mistakes to avoid
- Raising risk after a losing streak to win it back — this is the fastest path to account destruction
- Treating 1% as a profit target rather than a maximum loss cap
- Upgrading to a higher tier based on confidence rather than track record