1 experienced trader advised me to use just 1% of my amount in trading . He said your risk should be low than this percentage. Do trading in smooth manner . Once or twice in a month any good move of market wil bring good profit for you so why you should take high risks.
How much to risk per trade?
- Thread starter castor_t
- Start date
Anybody here risk micro amounts eg 0.2% per trade on position trades as opposed to the often mentioned 1 to 2%?
Let's say your setups were very frequent then wouldn't the less risked be the better (assuming commissions is not a problem)?
In this scenario of a 'conveyor belt' of positions being added, there would significant diversification benefits and possible psychological benefits to allow trends to run until they turn as each position would be insignificant.
Let's say your setups were very frequent then wouldn't the less risked be the better (assuming commissions is not a problem)?
In this scenario of a 'conveyor belt' of positions being added, there would significant diversification benefits and possible psychological benefits to allow trends to run until they turn as each position would be insignificant.
That would depend on the size of your trading account.
i don't see how account size makes a difference as we're talking percentages
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Another lost soul, confused by percentages. I weep for the future.
Me confused by percentages? Or was that directed at the other poster?
Directed at you.
Maybe you're the lost soul confused by percentages?
I discussed the % risk model of position sizing.
If the % risked per trade didn't matter then a person risking 100% on a single trade would have the same drawdowns and account blow up chances as somebody risking 0.1% per trade.
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But I mentioned "ignoring commissions" on my original post on this matter.
Can you point me to anything (book or online article) that suggests that % risk model becomes irrelevant the more capital a person has?