How much shold one risk in a single trade?

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

  1. BON

    BON

    All or Noting
     
    #21     Aug 31, 2010
  2. epetrov

    epetrov

    this sounds really good :D
     
    #22     Aug 31, 2010
  3. Celine

    Celine

    More or less 1% depending on price action is working for me and like someone said here - no risk no profit
     
    #23     Aug 31, 2010
  4. 5%......willing to sufffer 30% Drawdown.

    6 successive maximum losers..never happened to me in 10 years....maybe it will.


    Only make about 6-12 "trades" a year.
     
    #24     Sep 1, 2010
  5. So you people that risk less than 1% in a single trade, does that mean that you are consistantly in 100-200 positions to maximize your account. And if so, how do you pick your stocks? Are you just throwing darts at a newspaper, letting the losers hit the stops and the winners run all day?
     
    #25     Sep 1, 2010
  6. 007Arb

    007Arb

    It all depends on the volatility of what you are trading. No great revealation here that you make (and lose) your most money when you are at your highest exposure of 100%. I have a seven figure account and will go to 100% in increments if there is trend persistency with little to no volatility. But I can only do that in the open end bond funds (primarily junk bonds) because they are so trend persistent once they get running and when the trend does change it is with very little volatility.
     
    #26     Sep 1, 2010
  7. dalen

    dalen

    I probe ES with .5-1% stops until I catch it, then add and peel off accordingly while riding.
     
    #27     Sep 1, 2010
  8. bone

    bone

    Small enough that your emotions won't interfere with the mechanical efficiency of your trading system - emotions can be arbitrary and impulsive.

    Large enough so that after everybody gets their respective piece of your hide there remains a satisfying jingle in your pocket and a contented sleep at night.
     
    #28     Sep 1, 2010
  9. No.Heat

    No.Heat

    Risk aversion is paramount but risk too little and you under use capital.

    Find the balance.

    No Heat
     
    #29     Sep 1, 2010
  10. No because that implies you are riding every position down to 0 if you are wrong. Also, if you have 100 stock positions then you are 100% long stocks and your risk is more like 10%+, not 1%.

    As an example, let's say you go long ES and have a 50 point stop, approx 5% of the face value of the contract. If you risk 1% on the trade, then your net exposure is 20% long.
     
    #30     Sep 4, 2010