← Glossary
Dollar risk
Dollar risk is account equity multiplied by the risk-per-trade percentage from your risk profile. It's the budget the position sizer spends: shares are sized so that if the stop is hit, the loss lands at or below this figure, never above it. Actual dollar risk can come in slightly under budget, since share counts are rounded down.
DollarRisk = Equity × RiskPerTradePct / 100This explains what dollar risk measures. It isn't investment advice — see the disclaimer.