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The 1% Rule
2:10 · 7 chapters · Forex basics, part 4
What you'll learn
The 1% rule in 3 minutes: why it works, the position size formula, and why a 50% loss needs +100% to recover.
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- Key point 1
- Five losses at 10% vs 1% per trade
- Key point 2
- Lots = risk $ ÷ (stop pips × $10) on USD-quoted pairs
- Key point 3
- Worked example: $5,000, 1%, 25-pip stop = 0.20 lots
- Key point 4
- Lose 50% and you need +100% to get back
- Key point 5
- Daily loss limits stop a bad run getting worse
Rules and limits from regulators and official sources; every price, account and chart in the video is an example. Education, not financial advice.
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The video is presented by an animated host with a computer-generated voice; the research and checks are by the FX Recap team. Risk warning: forex and CFD trading carries a high risk of losing money because of leverage, and most retail accounts lose money. This is education and review, not financial advice. FX Recap may earn a commission from some broker links; see our affiliate disclosure.