How much risk is too much?

[bedsit]

You can check me out if you want, I'll send you my account name, I'm in the top 20 of 139,000 players.

That's excellent JTD - in top 20 out of 139,000 players.

When I said I can't imagine - I was referring to my experience with demo account trading - I wouldn't trade the same way using my real account.

 

[bedsit]

So your upside potential isn't limited? I.E. you haven't said, "At this point I'll take my profit"? Do you not take the same risk with all trades? E.G. 2% of capital?

I think if I were doing this I would need to adhere to a strict set of rules, i.e. this much capital and no more; otherwise I would end up chasing my losses by doubling up, and end up out of money very quickly. Surely the temptation is there, when you're confident in a trade, to stake more than you know, in your rational thoughts, you should?



Okay and what if, hypothetically, your stop loss comes during the middle of a massive sell-off? You could, in theory, lose more than 2% of your account, correct?

I was talking only about the amount of money I was prepared to lose - a potential cost of that trade. And for that trade potential cost was £1,000 or 2% of the account.
About potential profit - it was limited. For this trade I had 2 targets, so following the price action I closed 1/2 when my 1st target was hit and moved stop to break even at the same time. Once the price hit 2nd target I closed the remaining 1/2. One can calculate risk/reward from all this, but I don’t pay too much attention to it.

Agree with you 100% about adhering to strict set of rules - easier said than done. Anyway still hoping I may get there one nice day - at the moment still struggling with the discipline issue.

Please note this is my style of trading and it may not be suitable for different traders - some of them don’t use stops, average down, no limit on upside etc.

You asked about extreme situations - well I mainly trade eur/usd which is the most traded fx pair. FX market is the world’s largest financial market with $4 trillion traded every day.
In that trade I was short eur/usd - betting on euro falling against the dollar. My stake was £15.15 per pip which came to total exposure of £15.15 x 14338 = £217,220. So in the worst case scenario - if all of a sudden usd becomes worthless I would lose £217,220. In that case the current system would most likely cease to exist - so no point worrying too much about it.
Sometimes there is slippage during important reports (you can check the chart tonight at 19:15 BST - FOMC statement), but again I avoid trading around that time.

 

[bedsit]

Thanks to the members who participated - so out of 9 most popular choice is 2% or 5%

Not any more. At this moment the most popular choice is 5% among the 17 kind members.
Thaks again - I'll try 3-5% for the best set ups and see how it goes. For the normal trades I'll stick to 2% and for the aggressive entries 1% or less.

 

[Hotch]

Not any more. At this moment the most popular choice is 5% among the 17 kind members.
Thaks again - I'll try 3-5% for the best set ups and see how it goes. For the normal trades I'll stick to 2% and for the aggressive entries 1% or less.

Do the maths, your setups are unique to you, so you need unique MM.

 

[GOLD]

weve all done 10% and more hoping for that bounce so as long as youve got the cash dont worry

 

[bedsit]

weve all done 10% and more hoping for that bounce so as long as youve got the cash dont worry

Thank you for the advice GOLD.

Your posts are worth their weight in gold - 4 posts in 10 years.

PS One of the oldest T2W members chose 5%.