Tail risk is the risk of an extreme, low-probability loss occurring — one that sits in the "tail" of the probability distribution of outcomes, far beyond what typical volatility measures would suggest. It's the same underlying idea as a black swan event, but framed as an ongoing statistical property of markets rather than a single occurrence.
Standard risk metrics like standard deviation or basic VaR tend to understate tail risk, since financial market returns have historically shown "fatter tails" — more frequent extreme moves — than a normal distribution would predict.
Next step
Guide
How to Measure Risk Across All Your Open Positions
Risk per trade only describes one ticket. How to add up what your stops are worth, split the book into currencies, and read the margin figures the platform is already showing you.