How much should I risk per trade?

[murray t turtle]

Hi guys, I'm a relatively new trader. I've read in trading books (eg Market Wizards) that a trader should risk about 1% of his capital on any one trade.

But I've also read in William O'neil's books that you could risk more than that.

Here's an excerpt from an IBD article on position sizing:

"O'Neil suggests investors with portfolios of $20,000 to $200,000 limit themselves to four or five carefully chosen stocks that they know and understand. Portfolios of between $5,000 and $20,000 might need just three stocks. If you are just dipping a toe with a portfolio of $5,000 or less, narrow your watch list down to the two best stocks you can find that are in actionable chart positions."

If I have a $5000 in capital and I buy 2 stocks. Am I risking 50% per trade? Isn't that way too much?

Thanks

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Thats right/7 0r8%.
And buying 2 or anything is too much/untill you have been an IBD subscriber for year$ or have year$ of charts.
I like the way he expects all his reader to out perform SPY/LOL/True;
but so few buy SPY + or beat SPY 52 weeks %.
IF you buy 2 of anything , i would buy 1 SPY also if i were you.
Since im not you i bought qqq today + closed TECS, sqq + qqq profits earlier,this week
I may even buy an underperformer like SPLV or buy it buy next monday.
I never have bought it yet/but never predict SPY or qqq...................................................;
+ IBD founder never did disliked that one\ like he disliked GE\LOL