How much to risk per trade?

Discussion in 'Risk Management' started by castor_t, Jun 12, 2013.

  1. 1 experienced trader advised me to use just 1% of my amount in trading . He said your risk should be low than this percentage. Do trading in smooth manner . Once or twice in a month any good move of market wil bring good profit for you so why you should take high risks.
     
    #21     Jun 27, 2013
    comagnum likes this.
  2. Newc2

    Newc2

    Anybody here risk micro amounts eg 0.2% per trade on position trades as opposed to the often mentioned 1 to 2%?

    Let's say your setups were very frequent then wouldn't the less risked be the better (assuming commissions is not a problem)?

    In this scenario of a 'conveyor belt' of positions being added, there would significant diversification benefits and possible psychological benefits to allow trends to run until they turn as each position would be insignificant.
     
    #22     Feb 1, 2019
  3. deaddog

    deaddog

    That would depend on the size of your trading account.
     
    #23     Feb 1, 2019
  4. Newc2

    Newc2

    i don't see how account size makes a difference as we're talking percentages
     
    Last edited: Feb 1, 2019
    #24     Feb 1, 2019
  5. deaddog

    deaddog

    It doesn't as long as commissions and slippage are not a factor. That being said the better capitalized you are the less it becomes a factor.
     
    #25     Feb 1, 2019
  6. Overnight

    Overnight

    Another lost soul, confused by percentages. I weep for the future.
     
    #26     Feb 1, 2019
    comagnum likes this.
  7. Newc2

    Newc2

    Me confused by percentages? Or was that directed at the other poster?
     
    #27     Feb 1, 2019
  8. Overnight

    Overnight

    Directed at you.
     
    #28     Feb 1, 2019
  9. Newc2

    Newc2

    Maybe you're the lost soul confused by percentages?

    I discussed the % risk model of position sizing.

    If the % risked per trade didn't matter then a person risking 100% on a single trade would have the same drawdowns and account blow up chances as somebody risking 0.1% per trade.
     
    Last edited: Feb 1, 2019
    #29     Feb 1, 2019
  10. Newc2

    Newc2


    But I mentioned "ignoring commissions" on my original post on this matter.:confused:

    Can you point me to anything (book or online article) that suggests that % risk model becomes irrelevant the more capital a person has?
     
    #30     Feb 1, 2019