Risk Management and Position Sizing
A hypothetical risk budget is account equity multiplied by a chosen percentage. It is a planning input, not a promise that losses cannot exceed it. Gaps and costs can change outcomes.
Learning outcomes
✓ Explain a risk budget
✓ Explain sizing from a stop distance
✓ Explain risk-reward planning
Course curriculum
1. A risk budget · 12 min
A hypothetical risk budget is account equity multiplied by a chosen percentage. It is a planning input, not a promise that losses cannot exceed it. Gaps and costs can change outcomes.
2. Sizing from a stop distance · 12 min
Lots equal risk budget divided by stop distance in pips and pip value per lot. Round down to the allowed lot step and then check margin. If the result is below minimum size, do not round up.
3. Risk-reward planning · 12 min
Planned reward divided by planned risk is a ratio, not a win probability. Record both your assumptions and the actual simulated outcome; include spread and charges in review.