Risk management quiz · TradeBridge IB

1.In risk management, what does "risk per trade" refer to?

The margin your broker sets aside to open the positionThe amount you would lose if your stop-loss is hitThe total notional value of the positionThe spread you pay when you open the trade

2.You have a 10,000 USD account, risk 1% per trade and place a 25-pip stop on EUR/USD. What position size matches your risk?

4.00 lots1.00 lot0.25 lots0.40 lots

3.What is the value of 1 pip on 1 standard lot of USD/JPY, before converting to your account currency?

1,000 JPY10 JPY100 JPY10 USD

4.What is the main purpose of placing a stop-loss based on market structure?

To keep every stop exactly 20 pips from entryTo make sure the trade cannot lose more than the spreadTo place the stop where the trade idea is clearly invalidatedTo avoid having to calculate position size

5.A trade risks 25 pips to target 50 pips. Before costs, what win rate does this need just to break even?

50%25%About 33.3%About 66.7%

6.An account falls by 50%. What percentage gain is needed to return to the starting balance?

100%50%75%150%

7.Why can your actual loss sometimes be larger than the amount you planned to risk?

Because position-size formulas ignore pip valuesBecause risk percentages compound upwards after a winBecause take-profit orders reduce the effect of a stop-lossBecause prices can gap or jump past your stop, so it fills at a worse price

8.Which of these is an example of a loss limit rather than a per-trade risk rule?

Risking 1% of the account on each tradeStopping trading for the day after losing 3% of the accountPlacing the stop 1.5 times ATR from entryRounding position sizes down to two decimal places