Track 05 · Stay in the game
Risk Management
Position size, stop placement and the arithmetic of drawdowns. Survival comes before everything.
Free learning note
Size changes the consequences.
In a simple same-currency, whole-unit example, planned risk equals the distance between entry and stop multiplied by units. Real execution can differ because of slippage, fees and market gaps. Contract products need additional specifications.
An example to think through
An illustrative account of 10,000 at 1% planned risk has a risk budget of 100. With an entry of 100 and stop of 95, that is 20 whole units before fees and slippage. This is arithmetic, not a recommended allocation.
Try this on a historical chart.
Use the calculator to compare 1% and 2% with the same entry and stop. Notice what changes and read the tool’s limitations.
Explore the risk calculatorProposed course outline
- Module 1Risk per trade
- Module 2Position sizing
- Module 3Reward-to-risk and expectancy
- Module 4Drawdown arithmetic