Define the scenario
Choose an entry price, a hypothetical exit level and a dollar loss budget. The difference can illustrate position size under those assumptions. It does not establish that the budget is appropriate for your circumstances.
Include execution risk
Markets can gap, trading can halt and liquidity can disappear. A stop order does not guarantee the stop price. Fees, spreads, slippage and taxes can change results. Do not describe a calculated amount as a guaranteed maximum loss.
Consider the whole account
Several positions can lose value at the same time. A small risk budget per trade does not automatically mean low overall portfolio risk. Account for concentration, leverage and money you need soon.
Put it into practice
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General education, not personal investment, legal or tax advice. Rules and product terms can change. Confirm current requirements at the original source.