Position size: the 1% rule
The 1% rule
Professional traders rarely risk more than one or two percent per trade. Here is the math.
Example
| Account | $1,000 |
| Risk 1% | $10 |
| Stop loss | 100 pips |
| Lot size | 0.01 lot ($0.10 / pip) |
With one thousand dollars, one percent is ten dollars. With a 100 pip stop on gold, that is a zero point zero one lot.
Formula
- Lot = risk $ / (stop pips x $ per pip per lot)
- Gold: $10 per pip per 1.00 lot
Lot size equals your risk in dollars divided by stop pips times the pip value.
Why it works
- 10 losses in a row = only about -10%
- You stay in the game
Even ten losses in a row only cost about ten percent. You stay in the game.
Learn it, then trade it with signals.
GOFX AI scans gold around the clock and sends setups with entry, stop loss and take profit to your phone - every win and loss published.
GOFX AI scans gold around the clock and sends setups with entry, stop loss and take profit to your phone - every win and loss published.
Trading involves risk. Lessons are for education, not financial advice.