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Risk & position sizing: the math that decides survival
Strategy gets the attention; sizing decides who's still here next year. The same system compounds at one risk setting and detonates at another — and the boundary between those two settings is computable in advance.
This cluster works the actual formulas: risk per trade, R multiples, drawdown recovery asymmetry, risk of ruin. Every article pairs with a calculator, so the numbers in the text become your numbers by the end of the page.
Start with how much to risk per trade. Then run your own win rate and R through the risk-of-ruin calculator and read the number it prints twice.
Start here
How Much to Risk Per Trade: The Position Sizing Math That Decides Survival
14 min read
The core math
How Much to Risk Per Trade: The Position Sizing Math That Decides Survival
There is an exact, mathematically optimal answer to 'how much should I risk per trade.' It's called the Kelly criterion — and betting it at full strength is one of the fastest ways to blow up a real account. Here's the formula, the trap inside it, and the fraction the pros actually use.
Position Size Kills.
The thing that blows up trading accounts usually isn't the strategy. It's the position size — and unlike an edge, that's something you can fix before your next trade.
Your Risk of Ruin Isn't Zero.
We computed real ruin probabilities with the same seeded engine behind our free calculator: a trader with a genuine edge, risking a 'standard' 2% per trade, has a 0.6% chance of losing half the account — and a 43% chance of touching the -10% line that fails a prop challenge. The curve doesn't climb. It explodes. Every number regenerates from one command.
Drawdown, honestly
Drawdown Recovery: The Math Is Brutal. The Plan Isn't.
Losing 50% means you need +100% just to get back — the asymmetry every trader learns too late. Here's the full recovery table from our public calculator, the three kinds of drawdown and how to tell which one you're in using your own journal, and the honest part: our own EA's backtest once sat 73% below its peak. We publish that number on purpose.
Count R.
Dollars and win rate are the two numbers that hide whether you actually have an edge. Here's the unit professionals measure in instead — and the one honest number it produces, which you can calculate on trades you've already made.