This is an option for everyone who intends to trade in any market. Most trading instructors will use percentages such as 1%, 2%, or even 5% of total account value every deal, but how comfortable you are with these quantities will depend on your degree of experience. Because rookie traders lack trust in themselves due to a lack of expertise and familiarity with trading or new systems, using a lower proportion of risk levels makes sense.
For example, if your trading approach averages one transaction per day and you risk 10% of your original balance on each trade, it only takes 10 consecutive losses to deplete your account. Even if you are an experienced trader, taking such a large risk in one deal makes little sense.

Determining your risk tolerance is essential for making informed investment decisions that align with your financial goals and emotional comfort. Risk tolerance depends on factors such as your investment horizon, financial situation, income stability, and psychological ability to handle market fluctuations. Conservative investors, typically with short-term goals or low-risk appetites, may prefer stable assets like bonds or fixed deposits. Moderate investors might balance risk and return through diversified portfolios including stocks and mutual funds. Aggressive investors, usually with long-term horizons and higher risk capacity, may chase higher returns through equities, cryptocurrencies, or startups. Assessing your risk tolerance involves honest self-evaluation, possibly aided by risk-assessment questionnaires or financial advisors. Understanding your comfort level with potential losses helps build a suitable investment strategy, ensuring you stay committed during market volatility while working toward your financial objectives.