"Trade with money you can afford to lose" How ?

TWI

Senior member
2,536 254
I think there is a general perception that trading is an all or nothing game. It is not about sticking it all on black and hoping for the best. It is a gradual process of increasing risk. It should never be necessary to get to the point where you are staking "everything" on your position. It takes considerable time to build up to the point where you can even make a living from it. There is never a need to take unacceptable risk, as you improve and your equity grows you can afford to take bigger risks. Position size should always be correlated to your finances anything else is lack of discipline and likely to fail.
 

TheBramble

Legendary member
8,394 1,170
twalker said:
It is a gradual process of increasing risk.

Increasing risk isn't such a good idea IMO.

Maybe increasing absolute amount risked as your trading capital increases, but I would suggest keeping your risk at the same (very low!) percentage of your total capital at all times.

But then again, I am very risk averse and will probably never make a million in any one trade...

(but I will let you know when/if I do).
 

TWI

Senior member
2,536 254
I have found that with confidence come not only increase in capital risk but also increase in risk on that capital. More about being better at what I was doing than anything else. As I learnt more about a particular markets characteristics and how to get out of positions so I found it is possible to comfortably increase risk. This is not something that has continued beyond a point but I find risking 5% of equity on a single trade is now an acceptable risk whereas in the beginning 1% was more than enough. I thin the most important thing is to never step out of your own persanal comfort zone.
 
 
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