The 1% rule
Size so that being wrong is boring.
The arithmetic
Risk at most 1% of the account per trade. With a $2,000 account that is $20 of risk. If your stop is $5 away (per share/unit), the position is $20 ÷ $5 = 4 units. The chart sets the stop; the rule sets the size.
Why 1%
Because losing streaks are normal, not bad luck. Ten losses in a row at 1% is a -9.6% dent; at 10% per trade it is ruin. Survival is the strategy that lets skill compound.
Practice like it matters
In the practice arena, keep a fake account and honor a fake 1% rule. The habits you rehearse with pretend money are the ones that appear when money is real.
Quick check
Account $1,000, 1% rule, stop distance $2 per unit. Position size is…
- 5 units
- 50 units
- 500 units
- 1 unit
$10 risk ÷ $2 per unit = 5 units. Small enough to survive, big enough to matter.
This lesson is part of the free learning path at /academy/ — progress, XP and boss games live there.
Educational content only — not financial advice.