1% rule

A safety habit: on any one trade, never risk losing more than one small slice, one part in a hundred, of your money.

The fuller meaning

A fixed-fractional risk guideline: size each position so that hitting the stop loses about 1% of the account. Ten straight losses then cost roughly 10%, which hurts but is survivable, and the amount risked shrinks as the account shrinks. Lessons give 0.5% to 2% as the usual range.

1% rule, also called 1% risk.

1% rule

The fuller meaning

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