Alot of people say you should never risk more then 1% of your bank on any one trade, just curious this 1% loss isnt the stoploss being used in thier trade is it? so for example if one made five trades with all those trades being stopped out they would lose almost 5% of their bank?
qwertyuiop1
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Yes - it is.
WIth yout tsop loss in place you should not lose more than 1% (or some people may risk 2& or sometimes more).
But it in means how much you will lose when your stop loss is hit.
Chorlton
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The % Risked per Trade (in this example 1%) has nothing to do with where one places their stop. The two are completely different.
eg. One could place their stop 10% away from Price action but continue to risk only the 1%.
Chorlton
Summit8222
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Another thing to keep in mind too is that when you see a setup where you believe the probabilities are greatly in your favor, it might be time to double up on the trade as well. For example I trade some open strategies and when the EMINI's are up or down more then 10 points I find I have a much greater chance at making money. So on those days I double my size for those trades.
Rhody Trader
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I think it would be more correct to say % risk might or might not be related to stop. For some traders the stop is used as the exit point. For others, the stop is set as a protection of capital should things go horribly wrong, but the trader generally expects to get out at a much smaller risk point.
