How much should you risk per trade?
A question we get often: "1% of a $1,000 account is ten dollars — isn't that pointlessly small?" The answer is arithmetic, not a lecture.
The issue is not the gain. It is the recovery.
Lose half an account and you need +100% to get back to where you started. Lose 80% and you need +400%. Losses and gains are not symmetrical, and that asymmetry is the whole of the matter.
A losing streak is not a possibility
In a system with a 37.5% loss rate, over 782 trades, the longest expected run of losses is about seven in a row — and reaching ten is not unusual. That is a probability calculation, not pessimism.
What ten consecutive losses do to a $1,000 account
| Risk per trade | Remaining | Needed to recover |
|---|---|---|
| 1% | $904 | +10.6% |
| 2% | $817 | +22% |
| 5% | $599 | +67% |
| 10% | $349 | +187% |
| 20% | $107 | +834% |
At 5% you need to roughly double the system's performance simply to return to where you began. At 10% the account is effectively finished, because your position size shrinks with the capital and growth can never catch up.
The only question is not whether the losing streak arrives, but whether it finds you at 1% or at 10%.
A constraint worth admitting
On a $1,000 account, the smallest gold contract available (0.01 lot) with a 15-point stop risks fifteen dollars — 1.5% of the account. The rule is broken from the outset by the minimum contract size, not by the trader's choice.
Three real options:
- Accept 1.5% and trade gold. Ten consecutive losses means −14%: painful but recoverable.
- Find a broker offering smaller contracts — some provide 0.001 lot.
- Increase the capital. $3,000 makes the same trade 0.5% and gives you real room.
Something rarely said out loud
A $1,000 account, managed with sound risk, will not produce an income. The purpose of a small account is to learn discipline on it, not to live from it.
Someone who has mastered discipline on $1,000 can apply it to $50,000. The reverse is not true.