2% Rule

[Sergio77]

The 2% is the amount to risk, not the amount to invest. Obviously one does not open a store every day so there the utility function is different and the decision is based on other factors, like location, rent, etc. But in mid freq trading the 2% rule is reasonable because losses can accumulate fast. I risk 1% and I would like to go down to half of a percent.

 

[newwurldmn]

The 2% is the amount to risk, not the amount to invest. Obviously one does not open a store every day so there the utility function is different and the decision is based on other factors, like location, rent, etc. But in mid freq trading the 2% rule is reasonable because losses can accumulate fast. I risk 1% and I would like to go down to half of a percent.

Why don't you go down to .5% if that's the risk you want to run ?

 

[elt4x]

Whats u guys opinion about 2% risk compounding. Do any of u guys apply that?