The myth of letting your winners run

Discussion in 'Risk Management' started by Flowfollower, Jun 2, 2020.

How do you do it?

Poll closed Jul 21, 2020.
  1. Outlier hunting

    20.7%
  2. Profit target

    44.8%
  3. A combination of both eg trim and trail

    34.5%
  1. virtusa

    virtusa

    First calculate the expectancy of your system. That should give you an indication of what you can risk per trade.

    (Win % x Average Win Size) – (Loss % x Average Loss Size)
     
    #281     Nov 9, 2021
  2. Buy1Sell2

    Buy1Sell2

    No more than 2 percent of TLNW
     
    #282     Nov 9, 2021
  3. 5% -15% is insanely high. Besides making profits, capital preservation is also very important. Here’s a rough calculation, if you risk 2% per trade, it will take 50 losing trades to wipe your account. However by risking 5 or 6% you will blow your account just after 4 losses.
    I never risk more than 3% per trade but many traders I know prefer to follow the 1% rule. I think it’s good to keep the value somewhere between 1 to 2% and adjust it before every trade.
     
    #283     Nov 15, 2021