How do you actually work out your risk tolerance?
By separating three different things that get conflated — how much risk you need to take, how much you can afford to take, and how much you can emotionally tolerate — because the lowest of the three is the one that should govern, and questionnaires measure only the last.
Risk required. What return you need to achieve your goal, given what you can contribute and how long you have. This is arithmetic, not psychology. Someone with modest goals and a long horizon may need very little risk; someone underfunded may need more than is comfortable, which is genuinely useful information.
Risk capacity. How much loss your circumstances can absorb without damage. This depends on time horizon above all — a fall matters far less at 30 years than at 3 — plus income stability, other assets, dependants, and whether you would be forced to sell at a bad moment.
Risk tolerance. Your psychological willingness to see the value fall. This is a stable personality-linked trait, and it is what standard questionnaires assess.
Why the distinction matters. Someone can be comfortable with risk they cannot afford, and someone can have decades of capacity while being unable to sleep through a 20% fall. The binding constraint is whichever is lowest, because a portfolio you abandon at the bottom performs worse than a cautious one held.
The most useful questions to ask yourself:
What would you actually do if this fell 30%? Not what should you do. Past behaviour predicts better than stated intention, so if you have lived through a market fall, what you did then is the best evidence available.
When will you need the money, and could you postpone?
Would a loss change how you live?
What is this money for? Different pots can have different risk levels, which is more useful than one blended answer.
What actually reduces the problem: an adequate cash buffer so investments are never forced sales; automatic contributions, which remove timing decisions; checking the portfolio less often, which measurably reduces the urge to act; and writing down your plan while calm, to be read when not.
General information, not financial advice.