Free Course — Risk Management

Risk Decoded — Know Your Risk Before You Trade

"The only thing that separates good traders from broke ones? Knowing exactly how much they can lose before they hit buy."

📊 3 Interactive Tools ⏱ 20 min ✅ No login required
Tool 01
Risk Calculator
Find out exactly how much you could lose on a trade — and how many shares to buy — before you ever click buy.
The golden rule: never risk more than 1–2% of your account on any single trade. A 10-trade losing streak — which happens to every trader — can't kill you if each loss is just 1%. Risk 5% per trade and that same streak wipes out 40% of your account.
My Total Trading Money $25,000
How Much I'm Willing to Lose Per Trade 1.0%
Price I'm Buying At $50.00
My Exit Price If It Goes Wrong $47.50
I Could Lose This Much
$250
That's how many real dollars leave your account if you're wrong.
Buy This Many Shares
100
based on stop distance
Total Cost of This Trade
$5,000
20.0% of account
Stop Distance
5.00%
from entry to stop
R:R to Break Even
Need 1.0R to break even after fees
⚠️ Heads up! You're risking more than 2% of your account on one trade. If you hit 5 bad trades in a row (it happens to everyone), you'd lose 10%+ of your account. Most pros never risk more than 1-2% per trade.
Tool 02
What Could Actually Happen to Your Money?
Based on your strategy's numbers, here's where you could end up at the end of the year. Move the sliders to see different scenarios.
💡 The math is simple: if you risk 1% per trade and have a terrible week with 5 losses in a row, you've only lost 5% of your account. You can recover from that. Risk 10% per trade and one bad day can wipe you out.
My Strategy's Average Yearly Gain (If your strategy makes 25% per year on average, put 25) +25%
How Bumpy the Ride Is (Higher = more ups and downs. A calm strategy might be 15%, a wild one could be 50%) 30%
Starting Capital $10,000
Color Legend
< -2σ: Worst Case
-2σ to -1σ: Bad Year
-1σ to +1σ: Expected
+1σ to +2σ: Good Year
> +2σ: Best Case
Scenario Analysis
These aren't predictions — they're possibilities. Think of it like weather forecasting: we can't tell you exactly what will happen, but we can show you the range of realistic outcomes based on your numbers.
Scenario Probability Return Capital Becomes
Tool 03
Run 200 Simulated Years of Your Strategy
Click the button below and watch what could happen if you ran your strategy 200 different times. Green lines = you made money. Red lines = you lost money. The thick white line = the most likely result.
💡 Your strategy will have good years and bad years — that's normal. The goal isn't to avoid bad years, it's to survive them. Keep your losses small enough that you're still in the game when the good years come.
How Often I Win My Trades (If you win 6 out of 10 trades, enter 60%) 55%
How Big My Wins Are Compared to Losses (If you typically make $150 when right and lose $100 when wrong, that's 1.5) 1.5R
Losses are always 1x your risk (that's the baseline) 1.0R
How Many Trades I Make Per Year 100
Starting With $10,000
Risk Per Trade 1.0%
Expected Value / Trade
+0.33R
Positive edge
📈
Configure your strategy
and run the simulation