Am I trading too risky?

Discussion in 'Forex Trading' started by peilthetraveler, Nov 15, 2009.

  1. Checked my leverage. 20:1
    I trade $/pip value anyway.
     
    #21     Nov 18, 2009
  2. If you want to risk 2% of your account per trade:

    RISK = 0.02 * ACCOUNT BALANCE

    RISK = STOP LOSS * POSITION SIZE

    Set your STOP LOSS and calculate your POSITION SIZE

    or

    Set your POSITION SIZE and calculate your STOP LOSS.
     
    #22     Nov 18, 2009
  3. Mine's set at 50:1 but like you say it's all about $/pip value not how much margin one uses, it could just as easily be 500:1 for all the difference it makes!
     
    #23     Nov 18, 2009
  4. Huh :confused:


    Try...

    (Equity x Risk %) / Stop Loss = $ value per pip = trade size.

    Example for EUR/USD:

    ($10,000 Equity x 1% Risk) / 40 pips Stop Loss = $2.50 value per pip = 25k trade size.
     
    #24     Nov 18, 2009
  5. Remember this, DEFEND AND PROTECT you capital.




    The Ever "este balsero no sabe que rayo esta diciendo" VIPER
     
    #25     Nov 18, 2009
  6. ssb11

    ssb11

    take your last 300-500 trades and convert them to a ratio of your + or - divided by your initial risk. (so, if you made 200 points and risked 100 you would have a +2.00.) list them down column a beginning row 2. in b1 place a %; in c1 place a beginning account value. then use column b to multiply the % by the account value by the ration outcome. adjust the account value by that number. repeat.

    by changing the % you can see your return curve vs. various levels of risk. you will see the returns increase dramatically, level off, begin to decrease, and will eventually even take a positive edge negative should you risk enough. you can approx your optimal risk and better yet a point to its left at which the curve begins to plateau. as an individual trader i can see no reason to trade smaller than this or near this level.

    set standard of living upside markers for yourself and take $$ out of the account once they are achieved. you may wish to start your trading with an active and inactive portion to bolster the account should you start with a large dd.

    ssb
     
    #26     Nov 18, 2009
  7. la víbora habla con lengua sabia!
     
    #27     Nov 18, 2009