Question for spread betteors

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Old Dec 8, 2016, 3:52pm   #1
 
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Question for spread betteors

If you had 50,000 GBP/USD/EUR in your account, whats the maximum position you would take per point and why?

Not a trick question, I'm just doing a bit of research.

Cheers,
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Old Dec 8, 2016, 4:16pm   #2
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If you had 50,000 GBP/USD/EUR in your account, whats the maximum position you would take per point and why?
Hi ffsear,
For me, this would be governed by the strategy employed and the instrument(s) being traded. Assuming that the focus is on one instrument at a time, I would limit my leverage to 4:1. So, for example, in the case of the Dax, my maximum exposure would be £20.00 per point. A simpler way of looking at it is to trade at £1.00 per point for every £2,500.00 in the account.

As to why: using too much leverage is right up there with the reasons why so many traders blow up. For me, 4:1 is enough to make it worthwhile - without being so high that I need to wear nappies.
Tim.
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Old Dec 8, 2016, 4:18pm   #3
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Old Dec 8, 2016, 4:27pm   #4
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I don't have such a large SB account but 2% is the risk per trade for me. So, 2% x £50,000 = £1,000, divided by points between Entry and Stop.

This does mean I risk the max permissible amount per bet and have a variable £ per point stake.
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Old Dec 8, 2016, 5:15pm   #5
 
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I don't have such a large SB account but 2% is the risk per trade for me. So, 2% x £50,000 = £1,000, divided by points between Entry and Stop.

This does mean I risk the max permissible amount per bet and have a variable £ per point stake.
I run a similar system but vary my % risk according to how well my profitability is doing - I suppose you could call it adaptive risk.
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Old Dec 9, 2016, 12:19am   #6
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I run a similar system but vary my % risk according to how well my profitability is doing - I suppose you could call it adaptive risk.

On this line I would only adapt my £ risk according to the total account capital - if I had made £50k into £100k say, I would possibly drop the risk % to 1%. But whatever is the max risk per trade is also the min risk per trade, no second-guessing which might be the winner and which is "more risky".

Ahhh, if only.....
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Old Dec 9, 2016, 8:02am   #7
 
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It depends on the strategy that I have chosen to trade right now. However, I usually try not to risk too much and do not use a small amount per point.
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Old Dec 10, 2016, 12:37am   #8
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great qstn.

My 'ordinary max' on those kind of numbers, assuming current margin levels would still apply, would be e.g., around 40ish pp on ftse100, leaving a little spare in case something else pops up elsewhere. But there's no way I'd be thinking of 2-300pp.

Reason? some like their sleep...

Last edited by peakoil; Dec 10, 2016 at 12:53am.
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