Both are Risk Parameters. Portfolio Risk is the amount of your overall portfolio that you are comfortable having at risk (aka ‘losing’) at any time. For example, you have a total portfolio of $25,000 and you are willing to have 20% or $5,000 at risk. (This does Not mean you want to lose it but if you did, you would not feel like jumping out of the window!) Trade Risk is how much you are willing to risk on any single trade or stock purchase. There are two approaches that investors typically use to determine their trade risk. 1. A percent of your total portfolio – generally 2% or less but for beginners 1%. 2. Decide how many stocks you would like to have in your portfolio at any one time. For example, if the answer is 10, then divide that number into your Portfolio Risk of $5,000 and your trade risk would be $500. This along with your Stop Loss help you manage risk. (See Stop Loss and Calculator) Once you understand how your risk is under control, you will sleep a lot better at night!