The “risk 1–2% per trade” rule is a reasonable default for prop and institutional risk management, but it’s often the wrong number for small Australian retail accounts.
The advice sounds prudent: risk only 1–2% of your account on every trade. But applied mechanically to a $2,000–$5,000 account, it can turn sensible risk management into a financial and psychological dead end. For many small retail traders, the better question is not “What percentage is considered professional?” It is “What risk amount makes the…
