why 2%? why not 1%? or 3%? I guess I'm asking is 2% an arbitrary figure, or the result of your optimizing thru backtesting? if i'm not mistaken, 2% has been bandied about for decades but i never saw a good reason why.
1 percent of Total Liquid Net Worth is fine as long as it allows enough room for trade to move. Losses of 3 percent will reduce your liquid net worth quickly and cause you to have to have much greater wins and win percentage in order to be profitable. The max loss that you should sustain including commissions is 2 percent of TLNW. This is the sweet spot. I know this firsthand.