Define risk per trade (1-2% rule) — Hinglish notes

4.7.1 · Stock-Market › Risk & Money Management

"Risk per trade" KYA hota hai?

Yeh subtle trap hai: do traders dono "₹1,00,000 ki stock khareed sakte hain" lekin unka risk bilkul alag ho sakta hai, kyunki unke stop-losses alag distances par hain.

1–2% KYU? (Survival se derivation, koi magic number nahi)

Maano capital $C$ hai, aur tumhara loss fixed fraction $r$ (tumhara risk per trade) hai, $n$ consecutive losing trades par. $n$ losses ke baad capital:

$C_{n} = C (1 - r)^{n}$

Yeh form kyun? Har loss remaining capital ko $(1 - r)$ se multiply karta hai — losses multiplicatively stack hote hain, additively nahi.

Ab pooch: 10 losses ki buri streak ke baad, kitna bachega?

$\frac{C _{10}}{C} = (1 - r)^{10}$

$r$ (risk/trade)	10 losses ke baad capital bacha
1%	$(0.99)^{10} \approx 90.4%$
2%	$(0.98)^{10} \approx 81.7%$
10%	$(0.90)^{10} \approx 34.9%$
25%	$(0.75)^{10} \approx 5.6%$

1–2% kyun jeet-ta hai: ek brutal 10-loss streak bhi tumhe barely dent karti hai (~18% max). 25% par, das losses wipe out kar deti hain. Chota risk survival time khareedta hai tumhare edge ke liye.

Drawdown → recovery asymmetry

10% lose karo → chahiye $\frac{0.10}{0.90} = 11.1%$ gain (mild).
50% lose karo → chahiye $\frac{0.50}{0.50} = 100%$ gain (brutal).

Chota per-trade risk drawdowns ko chota rakhta hai, toh recovery easy rehti hai.

Rule se position SIZE KAISE karo (workflow)

Figure — Define risk per trade (1-2% rule)

Worked examples

Common mistakes (Steel-man + fix)

Recall Feynman: 12-saal ke bacche ko samjhao

Socho tumhare paas 100 gold coins hain aur tum ek betting game khel rahe ho jisme tum kaafi achhe ho lekin perfect nahi. Agar tum har round mein apne almost saare coins lagate ho, toh ek unlucky round mein tum broke ho jaate ho — game over. Toh uski jagah tum sirf 1 ya 2 coins per round lagate ho. Even agar tum 10 baar haaro, tumhare paas abhi bhi ~80 coins bache hain aur tum tab tak khelna jaari rakh sakte ho jab tak tumhari skill jeette nahi. 1–2% rule bas yahi hai: "itna chota bet lagao ki buri streak tumhe game se bahar na kar sake."

Active recall

"Risk per trade" kya measure karta hai?

Wo paisa jo tum lose karte ho agar price stop-loss hit kare, = shares × stop-distance — capital deployed NAHI.

1–2% rule state karo.

Ek single trade par total trading capital ka 1–2% se zyada kabhi risk mat karo.

Rule se position size ka formula?

Q = (r·C) / |P_e − P_s|, jahan r risk fraction hai, C capital, P_e entry, P_s stop.

Risk amount ko stop distance se kyun divide karo?

Kyunki shares × stop-distance = loss if stopped out; use allowed risk ke equal karne se share count milta hai.

2% risk par 10 losses ke baad bacha capital?

(0.98)^10 ≈ 81.7%.

Fraction L ka loss recover karne ke liye chahiye gain?

g = L/(1−L); e.g. 50% loss ke liye 100% gain chahiye.

Agar stop widen karo lekin risk 1% rakho, size ka kya hoga?

Position size shrink hoti hai (kam shares) kyunki ab har share zyada risk karta hai.

25% risk per trade fatal kyun hai?

(0.75)^10 ≈ 5.6% — 10-loss streak account almost wipe kar deti hai.

Connections

Stop-Loss Placement — $P_{s}$ provide karta hai jo stop distance fix karta hai.
Position Sizing — $Q = R / distance$ ka direct application.
Risk-Reward Ratio — per-trade risk ke saath pair hota hai expectancy define karne ke liye.
Drawdown and Recovery — asymmetry jo chote risk ko justify karti hai.
Kelly Criterion — ek formal optimum; 1–2% ek safe "fractional Kelly" hai.
Trading Psychology — chota risk emotions (aur revenge trades) ko control mein rakhta hai.