What is your % of risk per trade?

traderbinary

Junior member
21 1
The biggest problem, that deep inside we are still hunters, don't like to lose and have trouble understanding, somewhat, chaotic movements.. And when we think that we have thought about everything, but we see that market went in other direction, we want to put more effort (money), just more stubbornness (trades) and we believe that eventually will catch that prey (pips).. it's hard for brain to adapt to bigger picture, which is Forex and get used to idea that sometimes letting go "prey" now, is in reality to have more stability and "provision for the tribe" later..


Well said!
 
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Red Indian

Newbie
2 1
I have been trading hourly charts in Indian markets for more than 5 years now. The way I manage my risk is as below:

Risk per trade : 2%
Maximum positions at any one time : 8
Break-up of positions:
1. Stock index (S & P Nifty)
2. Bank stocks index (BankNifty)
3. Soyabean
4. Mustard seed
5. Gram
6. Copper
7. Crude
8. Silver

The system I use generates about one signal per week per item. I trade both long and short sides (depending on the trend). Sometimes, I may take only 1% risk. Overall, on most occasions, the total portfolio risk does not exceed 10% of the capital as I may not always get a signal from all the items that I trade.

The risk has to be smaller if the time frame being traded is intraday. I think the advice of 2% per trade (and having only 2-3 open positions at any time) applies only to intraday trading. So far as swing traders and positional traders are concerned, they need to have 10% of capital at risk in their portfolio otherwise most of the capital will remain unutilized.

BTW, with the above mentioned risk management, I have been generating 40-50% per annum with a maximum draw down of 10%.
 
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DitterPD

Active member
177 6
I have been trading hourly charts in Indian markets for more than 5 years now. The way I manage my risk is as below:

Risk per trade : 2%
Maximum positions at any one time : 8
Break-up of positions:
1. Stock index (S & P Nifty)
2. Bank stocks index (BankNifty)
3. Soyabean
4. Mustard seed
5. Gram
6. Copper
7. Crude
8. Silver

The system I use generates about one signal per week per item. I trade both long and short sides (depending on the trend). Sometimes, I may take only 1% risk. Overall, on most occasions, the total portfolio risk does not exceed 10% of the capital as I may not always get a signal from all the items that I trade.

The risk has to be smaller if the time frame being traded is intraday. I think the advice of 2% per trade (and having only 2-3 open positions at any time) applies only to intraday trading. So far as swing traders and positional traders are concerned, they need to have 10% of capital at risk in their portfolio otherwise most of the capital will remain unutilized.

BTW, with the above mentioned risk management, I have been generating 40-50% per annum with a maximum draw down of 10%.

Wow, thanks for the insightful post (y)
 

copa8

Newbie
5 2
Just curious to know what is the risk management of my fellow traders here.

Is 2% per trade is too much for a trader with a few months experience?
How many trades per week do you make?

Looking forward to your side of the risk :cool:

risk 0.5% per day trade
avg about 5 trades/day, so 25 trades/week
 

MJGrae

Newbie
4 0
It really depends on what you've calculated your probability of being in profit to be. If I have a 90% chance of having a profitable trade with a positive edge over all market conditions I would likely risk 5% and just rake it in. Others would probably do more than that if there really was a trade with such a probability and a positive edge but I get pretty uncomfortable with anything higher than that. There is always the unknown, and we can never assume that markets will stay the same.

Typically, I will shoot for the 1-3% range. Again, basing this off of the size of the edge and the probability of being right.
 

Liam M.

Newbie
6 0
While i was learning Forex, all the manuals said that the risk per trade not supposed to be over 1%, so it is what I’m trying to stick with, and my daily max loss can't be over 5% of my account
 

DitterPD

Active member
177 6
It really depends on what you've calculated your probability of being in profit to be. If I have a 90% chance of having a profitable trade with a positive edge over all market conditions I would likely risk 5% and just rake it in. Others would probably do more than that if there really was a trade with such a probability and a positive edge but I get pretty uncomfortable with anything higher than that. There is always the unknown, and we can never assume that markets will stay the same.

Typically, I will shoot for the 1-3% range. Again, basing this off of the size of the edge and the probability of being right.

That's the point of MM, you can be delusional about your entry, trade, marked prediction and that's why you must stick to some rule, so few mistakes wouldn't ruin your journey to the stars.

On the other hand, I read that that's why we have analysts, news and brains - so that we could catch the trend or some subtle signals, which others don't see and act upon it. Otherwise how are we different from the "perfect" expert adviser?
 

Wolfgang27

Newbie
7 1
When i had a smoller account it was 2-2,5% of my account. Now it is not more than 1,3%. However, the number of trades has increased.
 
 
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