Risk capital is the amount you transfer to your trading account. That should be the maximum risk you can take without affecting you other financial expenditures.
out of this amount daily capital limit of 10% is good. but we do not stick to that and trade using entire amount and lose more.
even if you lose entire capital in the account nothing should happen to your financials and your daily lift should continue without any trouble, that amount is you risk capital.
click overview and see.
see below link how much lost but still able to trade. You should be strong financially and emotionally.
I am showing this to you to prepare yourself for any enexpected things.
What is 'Risk Capital'?
Risk capital is the capital used in ‘risky’ investment funds. These funds are speculative, and might not give back any return at all. In fact, in many cases, such funds actually eat up the initial investment.
So why would you invest in it?
Basic rules of investment: the reward must be proportionate to the risk. If there are risky ventures where the payoff is potentially spectacular, then a risk inclined investor might feel like taking their risk capital out for a spin.
Commonly, risk capital yields high returns in very short periods.
When Would You Turn to Risk Capital?
As a trader, breaking down your own risk averseness is a basic need. This will depend on many factors, including (but not limited to) your age (older investors nearing retirement will not be inclined to speculative ventures), the stability of your cash flow, what other investments you have (a car loan or mortgage for example) as well as personal inclination.
More risk averse investors will tend to stay away from risk capital.
Aspects of Risk Capital
There are certain factors to be taken into account when investing risk capital
It should be a very small portion of a diversified portfolio
Due to the high chance of failure, the risk capital itself should be diversified into multiple investments. If you lose the capital on one, at least you won’t have lost all your capital
Risk capital must be money you are willing to lose entirely. Making a profit on risk capital is very chancy, and there should be no money in that which isn’t surplus to your general requirements.