Per Trade Risk

This is a discussion on Per Trade Risk within the Psychology, Risk & Money Management forums, part of the Methods category; What is your per trade risk, as a percentage of your total account/portfolio value?...

View Poll Results: What is you per trade risk as a % of your total assets
<1% 21 13.82%
1% 34 22.37%
2% 31 20.39%
3-5% 35 23.03%
5-10% 16 10.53%
>10% 15 9.87%
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Old Aug 15, 2005, 8:23pm   #1
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Per Trade Risk

What is your per trade risk, as a percentage of your total account/portfolio value?
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Old Aug 16, 2005, 3:49am   #2
 
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If a trader has a number of accounts that make up his total portfolio, how is he going to know for sure how much is his per trade risk?

If in one account he risks 5% of capital in that account using one strategy, but about 50% of another account using arb, it's not quite easy to estimate the per trade risk.
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Old Aug 16, 2005, 7:10am   #3
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Almost all the traders I know only have one account so this is easy to determine in my view.


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Old Aug 16, 2005, 8:17am   #4
 
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Assuming an individual trader, not an institution, has $100 as his capital, after allowing for all his other requirements, living expenses, insurance whatsoever.

If he wants to take a risk with that $100 by trading the markets, and he has to decide with which broker he should put that $100, would he put all that $100 with one broker alone?
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Old Aug 16, 2005, 8:28am   #5
 
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Quote:
Originally Posted by Anonymous
If a trader has a number of accounts that make up his total portfolio, how is he going to know for sure how much is his per trade risk?

If in one account he risks 5% of capital in that account using one strategy, but about 50% of another account using arb, it's not quite easy to estimate the per trade risk.
yes 1 to 2 percent seems the go
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Old Aug 16, 2005, 1:27pm   #6
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Quote:
Originally Posted by Anonymous
If a trader has a number of accounts that make up his total portfolio, how is he going to know for sure how much is his per trade risk?

If in one account he risks 5% of capital in that account using one strategy, but about 50% of another account using arb, it's not quite easy to estimate the per trade risk.
It's an easy calculation. Just take the actual EUR/GBP/USD risk per trade and divide it by the total value of all your accounts.

You say you're risking 50% on the arb side, but is half your account actually at risk of loss? Or is that how much of the account is used for margin, etc.
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Old Aug 16, 2005, 1:41pm   #7
 
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is half your account actually at risk of loss? Or is that how much of the account is used for margin, etc.
When carrying out any 2 leg spreads I just 4 times the required margin of 1 and don't bother about stop.
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Old Aug 16, 2005, 1:41pm   #8
 
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by risk of loss, do you mean the difference between where you enter and where your stop would be?
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