Forex Risk Per Trade: Calculate a Risk Budget
Express a hypothetical loss budget in cash and percentage.
Technical terms explained
Risk budget
A planned loss amount calculated from a hypothetical balance and chosen percentage.
Stop loss
An order or rule intended to close a position when an adverse price level is reached.
Exposure
The total position quantity or value whose price changes affect the account.
A risk percentage converts an account balance into a planned cash amount. It does not specify how much you should risk personally. A 1% teaching example is an illustration, not a suitability recommendation. Open correlated positions, gaps, slippage and costs can make total realised loss differ from a simple per-position estimate.
Our operational rule
Planned cash risk = balance × chosen percentage / 100.
Worked example
A hypothetical 2,000 account at 0.5% has a 10-unit planned budget before the details of execution.
Counterexample
A 10-unit estimate is not a promise that loss cannot exceed 10.
Watch for this mistake
Using the maximum a broker allows as a personal risk rule.
Charts are synthetic. These classification rules are not evidence of profitability.
Source and conventions
Lab operational definitions · version 1
Original exercise conventions: strict outside-wick FVG geometry; two completed neighbours on each side for swings; completed close through declared references; same-candle cross-and-return for a sweep. These are educational classification rules, not demonstrated trading edges.