Trade Risk can be defined as the value at risk within the Total Exchange Account balance at any given time. This is usually expressed as a percentage with the most common recommendation being that at no time, a position/trade should put at risk more than 1% of your Exchange Account balance.
Risk is managed via stop losses on an Exchange Account, so if a price moves against the intended direction then a stop loss limits losses below acceptable risk levels.
For example:
Assuming you have a $100,000 Exchange Account balance, at no time should your position size/trade size put at risk more than 1%of your account (i.e. $1,000).
We support this risk management method completely, it forms an integral part of the Risk Management strategies we employ.