A six-step path through the math every trade depends on: risk per trade, stop placement, position size, risk/reward, expectancy and drawdown recovery.
Position sizing · 4 min read
Pick the percentage of the account a single trade may lose.
Practice
Size a $10,000 account at 1% risk, then change risk to 2% and watch the position double.
Open the Position Size calculator →Risk management · 4 min read
Choose a stop distance from volatility and structure, not from the size you wish you could trade.
Practice
Set a 2×ATR stop on a $100 entry with a 2.5 ATR, then compare a 1× and a 3× multiplier.
Open the ATR Stop calculator →Position sizing · 4 min read
Convert any stop distance — points, pips or ticks — into a position size.
Practice
Size a $25,000 account risking 0.75% with a $3.50 stop distance.
Open the Position Size calculator →Risk management · 3 min read
Read a setup's breakeven win rate before deciding whether to take it.
Practice
Check a 3:1 setup, then drag the target down to 105 and watch the breakeven win rate jump.
Open the Risk / Reward calculator →Risk management · 4 min read
Turn a trade history into a single number: what one trade is worth on average.
Practice
Run a 55% win rate with a 2:1 payoff, then drop the win rate to 30% and watch the edge turn negative.
Open the Kelly Criterion calculator →Risk management · 3 min read
Price the cost of a losing run before it happens, in both percent and time.
Practice
See the gain a 20% drawdown needs, then try a 50% drawdown for the shape of the curve.
Open the Drawdown & Recovery calculator →The steps build on each other — the position sizing in step three depends on the stop placement in step two.
Read: What Is the 2% Rule in Trading? →