Prop Firm Risk Per Trade Calculator
Work out the largest risk per trade that survives a losing run without breaching a challenge's limits.
The question every evaluation comes down to is how much to risk per trade. Too much and a normal losing run ends the account; too little and the profit target is out of reach within the time allowed. A prop firm risk per trade calculator turns that judgement into arithmetic.
Formula: risk = 1 - (1 - max drawdown)^(1 / losing run), capped by the daily limit
Your figures
The evaluation or funded account's nominal size.
Consecutive losses the account should absorb without breaching.
Used for the daily loss constraint.
Results
Maximum risk per trade
1.048%
US$1,048.07 on this account size
- Risk in currency
- US$1,048.07
- Which rule binds
- Maximum drawdown
- Allowed by the daily limit alone
- 1.667%
- Allowed by the maximum drawdown alone
- 1.048%
- Consecutive losses survived at this riskBefore the maximum drawdown is breached.
- 10
- Losses in one day before breaching
- 4
What this means
Risking 1.048% per trade — US$1,048.07 — absorbs 10 consecutive losses before the maximum drawdown is reached, and 4 in a single day before the daily limit. The maximum drawdown is the tighter of the two here, so it is the one setting the ceiling.
- This is a ceiling derived from the rules, not a suggestion about what to risk. Most traders use a fraction of it to leave room for slippage and error.
- Assumes fixed-fractional sizing on the current balance, which shrinks the stake after each loss and so survives a longer run than a fixed cash risk would.
- Assumes each loss is a full stop-out. Slippage and gaps make individual losses larger than planned.
Maximum risk per trade: 1.048%
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Continue with these figures
About the Prop Firm Risk Per Trade calculation
There is a defensible upper bound, and it comes from the rules rather than from preference. The maximum drawdown has to survive a run of consecutive losses, and the daily loss limit has to survive a day of them. Whichever constraint is tighter sets the ceiling.
This funded account risk calculator estimates that ceiling. It is a maximum derived from the rules, not a suggestion about what to risk — most traders use a fraction of it, because the calculation assumes every loss is exactly one full stop-out.
Prop Firm Risk Per Trade formula
drawdown constraint, surviving N consecutive losses:
r = 1 − (1 − max drawdown ÷ 100)^(1 ÷ N)
daily constraint, surviving a day of losses:
r = daily loss limit ÷ trades per day
risk per trade = the smaller of the two
losses survived = ln(1 − max drawdown) ÷ ln(1 − r)- N
- The losing run the account should absorb without breaching.
- r
- Risk per trade as a fraction of the current balance.
- fixed-fractional
- Risking a constant percentage of the current balance, so the stake shrinks after each loss.
The drawdown constraint uses a compounding form rather than simply dividing the drawdown by the number of losses. Under fixed-fractional sizing the stake falls after each loss, so the account survives a longer run than the naive division suggests — at a 10% drawdown over ten losses the true answer is 1.048% per trade, not 1.00%.
The daily constraint is a plain division, because all of a day's losses are measured against the same starting balance. If you place three trades a day inside a 5% daily limit, three full stop-outs at 1.67% each reach it exactly.
The two constraints move in opposite directions. Trading more often per day tightens the daily constraint while leaving the drawdown constraint alone; wanting to survive a longer losing run tightens the drawdown constraint while leaving the daily one alone. Which binds tells you which lever actually changes anything.
Prop Firm Risk Per Trade: a worked example
A $100,000 account with a 5% daily loss limit and a 10% maximum drawdown, aiming to survive ten consecutive losses while placing three trades a day.
- Drawdown constraint1 − 0.90^(1/10) = 1.048%
- Daily constraint5% ÷ 3 = 1.667%
- Tighter of the two1.048% — the drawdown binds
- Risk in currency100,000 × 1.048% = $1,048
- Losses survived10
- Losses in one day before breaching4
$1,048 per trade is the ceiling. Raising trades per day to ten would flip the binding constraint to the daily limit and drop the ceiling to 0.5%.
How to use the Prop Firm Risk Per Trade calculator
- Enter your account size and the firm's daily loss limit and maximum drawdown.
- Set the losing run you want to survive. Ten is a common choice; a strategy with a low win rate should assume more.
- Enter how many trades you typically place in a day — this drives the daily constraint.
- Read which constraint binds. That tells you whether trading less often or targeting a shorter losing run would actually raise the ceiling.
- Treat the result as a maximum and set your challenge position size below it, dividing the cash risk by your stop distance to convert it into lots or contracts.
Limitations of the Prop Firm Risk Per Trade calculator
Every calculation makes assumptions. These are the ones that matter here.
- This is a ceiling derived from the rules, not a recommendation. It leaves no margin for slippage, gaps, or a losing run longer than the one you assumed.
- Assumes every loss is a full stop-out at the planned level. Slippage and weekend gaps produce losses larger than planned, which shortens the run the account actually survives.
- Assumes fixed-fractional sizing on the current balance. Risking a fixed cash amount instead survives a shorter run than the figure shown.
- Excludes commission and swap, which count towards a breach but are not part of the position risk.
- Says nothing about whether the resulting size can reach the profit target in the time allowed — that is the opposite constraint.
Frequently asked questions about Prop Firm Risk Per Trade
Why is the answer higher than dividing the drawdown by the number of losses?
Because fixed-fractional sizing shrinks the stake after each loss. Risking 1.048% of a falling balance ten times consumes exactly 10%, whereas risking 1% of the original balance ten times consumes 10% only if the size never adjusts. The compounding form is the accurate one.
How much should I risk to pass a prop firm challenge?
This calculator does not suggest a figure. What it gives you is the arithmetic ceiling: risk more than this and a losing run of the length you specified breaches the account. Most traders size well below it, because the calculation assumes no slippage and a losing run no longer than assumed.
Which constraint should I try to change?
Whichever binds. If the daily limit binds, trading less often raises the ceiling; if the maximum drawdown binds, trading less often changes nothing and the only lever is accepting a shorter survivable losing run.
How long a losing run should I plan for?
That depends on your win rate. A strategy winning 60% of the time will still see runs of six or seven losses over a few hundred trades; one winning 35% will see considerably longer. The risk of ruin calculator models this directly.
Does this work for the funded stage as well as the evaluation?
Yes — the arithmetic is identical, and funded accounts usually carry the same or similar limits. Enter whichever rules apply to the stage you are on.
Does it work as an FTMO risk per trade calculator?
It works for any programme whose rules you can type in, FTMO included, and it is not affiliated with FTMO or any other firm. Enter the daily loss limit and maximum drawdown from your own agreement; the ceiling comes from those two numbers rather than from a stored preset for a particular firm.
Last reviewed . See our methodology and editorial policy.
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