Learn prop trading · lesson
Calculate your ideal risk profile
Your risk per trade shouldn't come from feelings or round numbers — it comes backwards from the account's breach rules. Here's the template.
Start from the daily loss limit
Rule of thumb: never be able to breach the daily limit in fewer than 4–5 losing trades. Daily limit 4%? Risk at most 0.8–1% per trade — and stop for the day after 3 losses, so a bad day costs under 3% and never cascades into a breach.
Then check the max drawdown
Divide max drawdown by risk per trade — that's how many net losers you can survive. At 0.5% risk against an 8% drawdown you survive 16 straight losers; at 2% you survive four. A 45% win-rate strategy WILL see 6–8 loss streaks over a few hundred trades. Size so a normal streak is an annoyance, not an obituary.
Respect the drawdown type
Trailing drawdown changes everything: profits raise your floor, so early winners don't build a buffer you can spend later. On trailing programs, halve whatever risk number you got above until the limit locks at breakeven (most lock after 5–6% gain).
The template
Risk per trade = min(daily limit ÷ 5, max drawdown ÷ 12, half-Kelly of your tested edge). For a typical 5%/10% static program with a modest edge, that lands at 0.5–1%. If a program's rules force that number below what its profit target can realistically be reached with, the program is mispriced for you — pick another, don't oversize.
Theory is cheap — check it against real program rules.
See every program's limits side by sideEducational content, not financial advice. Formulas assume independent trades and honest backtests; real trading is streakier. Never risk money you can't afford to lose.