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Most prop firms allow you to risk 1% or more per trade. I use 0.5% on challenges, and here's the reasoning with numbers.

Assume a strategy with 45% win rate, 1.8R average winner, and a 10% total drawdown limit with a 5% daily limit.

• At 1% risk, a 10-loss streak costs 10% and ends the challenge. With a 55% loss rate, a quick simulation of 300 trades gives a streak of 10 or more in roughly 28% of runs. That is far too high for something that ends the account.
• At 0.5%, the same streak costs 5%, painful but survivable, and a streak long enough to hit 10% (20 losses) is very unlikely for this strategy.
• At 1%, the daily limit allows only five losses. At 0.5%, ten.

The cost is time. The 8% target takes about twice as long at 0.5% risk. With no time limit, that's a good trade-off.

What risk do others use on challenges? Do you change it once you're close to the target?

I went the same way after blowing my second challenge on a run of losers that, looking back, was completely ordinary for my setup. These days I sit at 0.4% on the first phase and I honestly do not miss the bigger size. The slower pace bothered me for the first couple of weeks, then I realised I was taking cleaner trades because a single loss no longer felt like an emergency.

The part I would add to your numbers is the daily limit side. With a fixed 0.4% I can take quite a few hits before the 5% line is even in view, so I never get that late-afternoon panic where you start forcing a recovery trade at the worst moment of the session.

On your second question, I do change it, but downwards rather than up. Once I am within roughly 2% of the target I drop to around a quarter of a percent and let the account crawl over the line. Pushing harder near the finish is exactly where I have seen friends throw away a passed phase.