Risk per trade
The amount you would lose if a trade hits its stop, usually stated as a percentage of the account.
Risking 0.5% of a $100,000 account means a $500 loss at the stop. The position size follows from the risk and the stop distance. Real losses can be larger because of spreads, commission, slippage and gaps.
In a challenge, risk per trade decides how many losses in a row the drawdown and daily limit can absorb. With a 10% drawdown, 1% risk survives nine straight losses; the tenth touches the limit.
Related
General definition. Rules differ between firms and change over time; your firm’s current terms always take precedence.