What is Risk Budget?
Risk budget is planned R or rupees you may lose in a period or across active setups.
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Risk Budget shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Risk Budget on Nifty (24,300): define rupee risk per trade before the 9:15 open; index gaps on global cues can skip planned risk budget levels — use exchange-supported stop types and size for gap beyond stop.
Reliance Industries perspective
Risk Budget for Reliance (₹1,300): stock circuits and 20% band limits can trap positions past your planned exit; keep risk budget outside circuit freeze zones where possible.
Bank Nifty futures perspective
Risk Budget on Bank Nifty (55,000): span margin changes intraday — a valid risk budget at entry may be too large after a margin hike; recheck buying power before adding lots.
How to validate
- Minimum sample: 30 closed trades on one strategy tag before trusting Risk Budget.
- Check for one outlier week inflating Risk Budget — export largest winners and losers.
- Recompute Risk Budget after including brokerage, STT, and slippage on F&O tags.
- Compare Risk Budget on the same date range as profit factor and max drawdown.
How to track in TradeLyser
- Open Strategy Board or analytics → filter by strategy tag and review period.
- Locate the widget or column reporting Risk Budget (or export trades to compute manually).
- Store snapshot values in weekly review: Risk Budget, profit factor, drawdown, trade count.
- If Risk Budget is custom, add a spreadsheet column fed from TradeLyser CSV export.
Best practices
- Publish Risk Budget per strategy, not only at account level.
- Use the same calculation window (weekly vs monthly) year-round.
- Pair Risk Budget with sample size in every review slide or note.
- Document formula used so mentors interpret the same number.
Common pitfalls
- Changing rules after fewer than 20 trades because Risk Budget moved slightly.
- Mixing intraday and positional tags when computing Risk Budget.
- Ignoring costs so Risk Budget looks better than banked P&L.
- Letting one outlier trade dominate the Risk Budget reading.
How to use this in TradeLyser
Allocate weekly R budget per tag; halt tag when budget spent.
Reference guide
| Context | Value | Reading |
|---|---|---|
| Daily risk budget | 1–2% of account per day (₹1,000–₹2,000 on ₹1L account) | No daily limit — single bad day can trigger significant drawdown |
Related terms
Max loss per day is a pre-set rupee or R ceiling — trading stops when hit.
Portfolio heat sums risk at stop (or max loss) across open trades, often as % equity.
Risk per trade is the planned loss at your stop — not the notional value of the position. A ₹10 lakh notional trade might risk only ₹3,000.
A trading plan is a written contract with yourself: what you trade, when you trade, how much you risk, and how you review. It turns discretion into measurable rules.
FAQ
Budget per week or month?
Week for day traders; month for swing — stay consistent.
Unused budget roll forward?
Usually no — avoids hoarding risk for revenge.
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