How much should you risk?

The amount to risk should be tied to the frequency and degree of system-related drawdowns. No one is right 100% of the time, and too high of a risk would wipe you out with variance, even if your system exhibits long term profitability. Low risk enables you to survive moments of bad variance.
 
Winjak said:
You told that you risk 15%, why? I don't think that you are a long-term trader. Don't you take such a risk too emotionally? I'd worried a lot if I risked such an amount of money. If we talk about sums, it's $1.500 from $10.000. You can lose them at once... I can't cope with this thought :)
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Surely, when I have long-term trades, I never risk so much. But some risky and short-term ones have brought good money to me, why not? I understand clearly that if I lose it'll be only my problem. That's why I don't do such tricks very often.
 
Alexfx79 said:
Surely, when I have long-term trades, I never risk so much. But some risky and short-term ones have brought good money to me, why not? I understand clearly that if I lose it'll be only my problem. That's why I don't do such tricks very often.
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Oh, I see. I thought you are just another newbie who's going to blow his account in the nearest future :D
Sorry, man!
Probably, you are just more risky than me, cause I can't allow myself to face such big risks in my everyday work :)
 
kut2k2 said:
Here's a new puzzle for you optimal sizers.

Here's the scenario:

There is a 35% chance that you win 20% of your bet ;
There is a 25% chance that you lose 15% of your bet ;;
There is a 20% chance that you win 12% of your bet ;
There is a 15% chance that you lose 6% of your bet ;
There is a 4% chance that you win 50% of your bet ;
There is a 1% chance that you lose 100% of your bet.

What percentage of your betting account should you risk to maximize your potential gain?
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Never ever risk more than 2% of your Total Liquid Net Worth on any one trade/idea.
 
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