Risk management for prop traders is the set of rules that decides how much you can lose on one trade, in one day and in total, before you ever think about how much you can make. In a funded account, those limits are fixed by the firm and measured in real time. Your job is to fit your trading inside them with room to spare.
This guide works through Greenwick's actual limits and turns them into rupee numbers: risk per trade, position sizing for NIFTY and BANKNIFTY options and futures, stop-loss placement, a daily stop, and the special risks of correlated indices, the MCX evening session and overnight gaps. At the end there is a risk plan template you can print and fill in.
01Why risk management is the whole game
On your own broking account, a bad day hurts but the account stays open. On a prop account, it does not work that way. Greenwick loss limits are measured on equity, which includes open profit and loss, and touching a floor at any moment closes the account. You do not get to wait for the trade to come back.
That changes the order of priorities. A strategy that makes money over a hundred trades is useless if a normal losing streak in the middle of those hundred trades takes you through the floor. Survival comes first, and profit follows from staying in the game.
In a prop account, your edge only matters if your risk lets you live long enough to use it.
02Risk per trade: the core number
Risk per trade is the rupee amount you lose if your stop-loss is hit. It is not the margin you block or the premium you pay. It is the distance between entry and stop, multiplied by your quantity.
Think of your limits as a funnel. Your account balance sits at the top. Below it is your max loss allowance. Below that is your daily loss limit. And at the bottom is the small amount you risk on any one trade. Every level should be a comfortable fraction of the one above it.
Set risk per trade against two references at once: the account size and the daily limit. The table below uses ₹10L accounts on each plan, with daily and max loss limits taken from the Greenwick rules.
| ₹10L account | Daily loss limit | Max loss | Risk 0.5% per trade | Share of daily limit |
|---|---|---|---|---|
| 2-Step | 4% = ₹40,000 | 8% static = ₹80,000 | ₹5,000 | 12.5% |
| 1-Step | 3% = ₹30,000 | 6% static = ₹60,000 | ₹5,000 | 16.7% |
| Instant | 2% = ₹20,000 | 5% trailing = ₹50,000 | ₹5,000 | 25% |
A practical guide: keep risk per trade at no more than a quarter of your daily limit, and preferably closer to an eighth. At ₹5,000 risk on a ₹10L 2-Step account, you can take eight full losses before touching the daily floor. At ₹20,000 risk, two losses would do it. On Instant, where the daily limit is tighter, many traders drop to 0.25%, or ₹2,500, which keeps them at an eighth of the daily limit.
03Position sizing for NIFTY and BANKNIFTY
Position sizing is where risk per trade becomes an actual order. The formula is the same for index options, index futures and stock F&O:
Maximum units = Rupee risk per trade ÷ Stop distance in points. Lots = Maximum units ÷ Current exchange lot size, rounded down. If the result is less than one lot, skip the trade or find a tighter, valid stop.
Exchange lot sizes change from time to time, so always use the current exchange lot size from NSE or BSE. Never rely on a number you remember from last year.
Example: buying a NIFTY option
Rounding down keeps actual risk at or below ₹5,000. Rounding up would quietly push you over your plan.
Example: BANKNIFTY futures
If 125 units is less than one lot, a 100-point stop is too wide for this account at this risk. The answer is to pass, not to risk more.
For option selling, the stop distance is how far the premium can move against you before you exit, and that can expand fast. Because equity includes open P&L, a sharp move against a short option counts against your daily floor immediately. Defined-risk spreads make the sizing far more predictable. The drawdown guide shows how open losses move you toward each floor.
Maximum margin use on Greenwick is 80%. Orders above that, or above the lot limits for your account size, are simply rejected with a reason. Lot limits per account size are listed on the rules page. But using available margin is not a sizing method. Size from your stop first, then check that the margin fits. Many careful traders keep their own margin use well below the 80% ceiling.
04Stop-loss placement that respects the floor
A stop-loss belongs where your trade idea is proven wrong, not where the rupee loss feels comfortable. Place it first, measure the distance, then size the position. That order matters. Traders who pick a quantity first and then squeeze the stop to fit usually get stopped out by normal noise.
- Use chart structure: below a swing low for longs, above a swing high for shorts, beyond the opening range or a clear level.
- Allow for the instrument's normal movement. BANKNIFTY and MIDCPNIFTY options can swing much further in a few minutes than a large-cap stock.
- Put the stop order in the system the moment you enter. A mental stop is not a stop when equity is measured continuously.
- Never move a stop further away once the trade is live. Move it closer, or to breakeven, only as the trade works.
05Max trades per day and the daily stop
Greenwick does not cap how many trades you take, but you should. Most disciplined intraday traders set a personal limit of around three to five planned trades a day. Beyond that, decisions tend to become reactions.
Pair the trade cap with a personal daily stop set well inside the official limit. A useful rule is to stop trading for the day once you have lost half your daily allowance, or after two or three losses in a row, whichever comes first.
The max loss floor stays at ₹9,20,000 no matter how much profit you make. The daily floor moves each morning with your closing balance.
The personal stop leaves ₹20,000 of room for slippage, a gap through your stop or a fast move on news. It also leaves you with a calm head for tomorrow. Our guide to trading psychology covers why that second benefit matters as much as the first.
06Correlation, MCX evenings and gap risk
NIFTY and BANKNIFTY in the same direction
NIFTY and BANKNIFTY often move together, because banks carry a large weight in the broader index. If you are long a NIFTY call and a BANKNIFTY call at the same time, you have not made two trades. You have made one larger bet on the market going up.
If each position risks ₹5,000, a broad sell-off can hit both stops together, and you lose ₹10,000 on a single idea. Treat same-direction index positions as one trade and split your normal risk between them: ₹2,500 each, not ₹5,000 each. The same logic applies to FINNIFTY alongside BANKNIFTY, and to SENSEX alongside NIFTY.
The MCX evening session
MCX trading in GOLD, SILVER, CRUDEOIL and NATURALGAS continues into the evening session. That brings two risks. First, energy contracts can move sharply on overseas inventory data and global news that arrives during Indian evening hours. Second, the daily loss floor resets once a day at 09:15 IST, so the floor set that morning still applies in the evening. If you lost ₹15,000 on NIFTY during the day, you start the evening with ₹15,000 less room.
Fatigue is real too. After a full equity session, decision quality drops. If you trade both sessions, set a separate, smaller evening budget inside your daily stop.
Avoiding gap risk with MIS
Overnight positions face gap risk: the market can open well beyond your stop, and your stop fills at the open price, not at your level. Intraday MIS positions on Greenwick auto-close at 15:15 IST, so they never carry gap risk. Overnight NRML positions are allowed only where your plan permits.
The account closes at the open, before you can act. An MIS position would have been flat at 15:15 IST the day before.
07Scaling risk after profit vs after loss
Your risk should respond to where you stand relative to the max loss floor, not to how you feel. The rule is simple: after a loss, cut risk; after a profit, raise it slowly or not at all.
| ₹10L 2-Step situation | Equity | Room above ₹9,20,000 | Suggested risk per trade |
|---|---|---|---|
| Start | ₹10,00,000 | ₹80,000 | ₹5,000 (16 full losses) |
| After a drawdown | ₹9,60,000 | ₹40,000 | ₹2,500 (16 full losses) |
| After steady profit | ₹10,50,000 | ₹1,30,000 | ₹6,000 (21 full losses) |
Notice the pattern. Halving risk after a drawdown keeps the same number of losses between you and the floor. Raising risk after profit is done by a small step, so the buffer still grows. Doubling up to recover a loss does the opposite: it shortens the runway exactly when you can least afford it.
On Instant, the max loss is trailing. It moves up with your highest equity and locks permanently once it reaches the starting balance. Until it locks, profit does not widen your buffer in the same way, so keep risk modest until the floor stops moving. The challenge types guide explains how each plan's floors behave.
- Size every trade from the stop distance
- Halve risk after a meaningful drawdown
- Count correlated index trades as one
- Use MIS unless you have a reason to hold
- Choosing lots first and fitting the stop later
- Increasing size to win back a loss
- Holding NRML positions with little room above the floor
- Treating 80% margin as a target
08Printable risk plan template
Write your plan down before you trade and keep it beside your screen. The example column uses a ₹10L 2-Step account; replace it with your own numbers.
| Rule | Example, ₹10L 2-Step | My number |
|---|---|---|
| Account size and plan | ₹10L, 2-Step | ________ |
| Official daily loss limit | ₹40,000 (4%) | ________ |
| Max loss floor | ₹9,20,000 (static) | ________ |
| Risk per trade | ₹5,000 (0.5%) | ________ |
| Personal daily stop | ₹20,000 | ________ |
| Max planned trades per day | 4 | ________ |
| Stop after consecutive losses | 3 | ________ |
| Same-direction index positions | Counted as one trade | ________ |
| Personal margin cap | 50% (official max 80%) | ________ |
| Product type | MIS by default | ________ |
| Evening MCX budget | ₹10,000 within daily stop | ________ |
| Risk after a drawdown | Halve to ₹2,500 | ________ |
- Fill in the plan before the open
Check yesterday's closing balance, note today's daily floor on your dashboard and write down your personal stop level.
- Size each trade from the stop
Use the formula with the current exchange lot size. Round down every time.
- Review at the close
Did you follow every line? Note any breaks of your own rules, even on profitable days.
Good risk management also makes payouts smoother, because steady daily results sit comfortably inside the consistency rule. See how that works in the profit split and payouts guide, and read why traders fail prop challenges for the risk mistakes most worth avoiding. Plans and account sizes are on the pricing page.
Greenwick accounts use simulated capital with live Indian market prices. Greenwick is not a broker or investment adviser, and nothing on this page is investment advice. Trading involves risk.