What the 1% rule really means
Risking 1% per trade means arranging your position size and stop-loss so that, if the stop is hit, you lose only about 1% of your account on that trade. On a €2,000 account, that is roughly €20 of risk per trade — not a €20 trade, but a trade where the loss is capped near €20.
The point is survival. At 1% risk, you could lose ten trades in a row and still keep most of your account and your composure. It turns an inevitable losing streak from a disaster into a bump.
The numbered method
Step 1: Work out 1% of your account. €2,000 × 1% = €20. This is the most you will let this trade cost you.
Step 2: Decide where your stop-loss goes based on the chart, and measure that distance in pips — say 25 pips.
Step 3: Find your allowed risk per pip: risk amount ÷ stop distance. €20 ÷ 25 = €0.80 per pip.
Step 4: Convert to a lot size using the instrument's pip value (roughly €10 per pip per full lot on a standard forex pair; about €0.10 per pip at 0.01 lots). To get €0.80 per pip you need about 0.08 lots.
Step 5: Round down and place the trade at that size, with the stop where you planned. Now the worst case really is about 1%.
Making it a habit
The discipline is to run this calculation before every trade, every time, in the same order: 1% of the account, stop distance, risk per pip, lot size. A position-size calculator or MetaTrader's built-in calculator can do the arithmetic so you just check the result.
As your account grows or shrinks, 1% changes with it, which naturally scales your risk up in good times and down in bad — a healthy, automatic feedback loop.
An honest risk note
"1% risk" caps your intended loss, not your guaranteed loss: a price gap can jump past your stop and cost more, and several 1% trades open at once can add up to much larger combined exposure. The rule protects you only if you also limit how many positions you hold and respect every stop. Even perfectly applied, it does not make trading profitable — it just keeps you in the game long enough to learn.