You should never ever risk more than 2% of TLNW

401k's are not trading vehicles that have the availability of margin. At least not for the majority. What we are discussing are trading accounts. Apples and Oranges.

Also, 401k's took large hits due to the inability of the average joe to use prudent risk management. ie diversity, age , getting out etc.

 

Where was "trading account" and "margin" mentioned?

 

The ET site is advertised as the #1 site for active traders.

 

So you never trade in correlated instruments in which your loss can exceed 2% of your TLNW? Bullshit.

 

I never ever do on any one trade/idea. I recognize that many 401k'ers do, but I posted this on a trading site and thought that it was a given that we were discussing trading.

 

You have not supported this claim with any evidence.

Why not 1%? Why not 3%?

 

It's just experience and common sense. Once you start exceeding the 2 percent level, you greatly limit the number of trades that you can make before you may have to close up shop. I have no problem with 1 percent by the way. I think we need to look at the fact that most traders lose and get out of the business. The main reason is that they do not control risk. It doesn't have to do with good entry or exit systems. It simply has to do with not having good, prudent risk management. "The trader that loses the least, makes the most money in the long run"--Izzy

 

i'm not sure if i understand the point of the poll. the size of the trading account will always be less than the tlnw. so 2% of trading account is always less than 2% of tlnw. correct?

 

My point is that most everyone here doesn't understand the first thing about correlation.

 

and, quite possibly, prudent risk management. It's best to err on the conservative side don't you think?