How much shold one risk in a single trade?

Discussion in 'Risk Management' started by epetrov, Apr 22, 2008.

  1. epetrov


    Hello folks,
    how much should one risk in a single trade?
    Should it be 0,5, 1 or even 2% from the risk capital?
    What do you think?
    I thing that the market is so unpredictable, that one mustn't risk more that 1%. This should stay between 0,5 and max 1%. Otherwise one can get hurt quite heavily.
    So, what do you think?
  2. Personal preference.. depends on how much percentage the individual wants to make per trade.
  3. JoeF716


    I think it depends on your capital. If your working with a pretty high capital, definitely don't risk as much. Probably .5 to 1. But if you're not working with much, go with 2 and lessen it up as your captial grows.

  4. vikana

    vikana Moderator

    Ideally, you should stay under 1%, preferably under .5%. Unfortunately, that's hard with a small account.

    This does not mean you should adjust your stops to .5% of capital if you're limited; it means that there are certain setups you can't take (imo).
  5. Up to 99% of equity on a spec play.
  6. With so little tolerance for downside don't expect to see much upside either. Without risk there is no reward.
  7. LOL I can't believe I am actually agreeing with stock turder

    man this is scary, I better not do this often :p
  8. I go up to 10% but Im also fairly picky about my setups and I sometimes go a week or more without making a trade.
  9. Risk per trade is directly related to opportunity factor (trade frequency).

    If you are a frequent intraday player, you can go down to 0.25% and still make a good living with little volatility in your equity curve.

    If, on the other hand, you are trading only a handful of times a week, then 0.5% upwards seems better, or the returns from trading will not be very high.
  10. It is very important to understand the concept of risk management and stock portfolio risk management in trading. With this, you will systematically know how much to risk without being too risky or too conservative, it all depends now on your own preferences.

    I encourage you read this good guide:

    <a href="">Risk management in stock</a>

    <a href="">Stock Portfolio Risk Management – Understanding the Strategy</a>
    #10     Aug 30, 2010