The 1-2% Rule in Forex: Foundation of Every Profitable Trader

If there's one rule that separates traders who survive from those who blow up, it's the 1-2% risk rule: never risk more than 1-2% of your total account on a single trade. **With 1% risk per trade:** You'd need to lose 50 consecutive trades to lose half your account. **With 5% risk per trade:** A losing streak of 10 trades leaves you down 40%. **How to calculate position size:** 1. Decide your stop loss in pips 2. Account × 1% = Dollar risk allowed 3. Dollar risk ÷ (stop loss in pips × pip value) = Lot size Example: $10,000 account, 1% risk = $100 risk. Stop = 30 pips on EUR/USD. $100 ÷ 30 = $3.33/pip = 0.33 lots. Do you use the 1-2% rule consistently, or has your risk percentage changed as your account has grown?