How much to risk per trade?

Newc2 said:
But I mentioned "ignoring commissions" on my original post on this matter.:confused:

Can you point me to anything (book or online article) that suggests that % risk model becomes irrelevant the more capital a person has?
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(Grin) But you did not mention ignoring slippage.

Sorry but I can't point you to an academic study only my own experience that it is easier to take losses when you have sufficient capital.

Calculate your slippage as a percentage of risk and you will see how capital becomes a factor.

FWIW I find it very difficult to realistically ignore commissions. I'm well capitalized and use 0.5% risk.
 
Before getting into any trade, make sure you never risk more you can afford to lose. Never risk so much in one trade, so that you don't end up losing all your capital. Never ignore the issues or spread and slippage since its easier to accept losses if you have enough capital
 
HanSolo said:
Position sizing and risk go hand in hand. You decide what you want to purchase then calculate where you want to put your stop loss then you need to calculate how much you can buy based on the maximum you are prepared to lose from your entire portfolio. This is a big subject. I such you read one of Van Tharpes' books on risk management. It is not something that can be taught in a forum post.
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%% Exactly.
Risk is like Edgar Allen Poe, Poem,Raven+ Reagan. How taxes galore?? Quoth the Reagan ; less is more:D:D
A good goal[ IBD idea works well] is risk $7 0r $8.00 , to make 24 or $30.But that's a cash goal +guide.
 
Risk tolerance will vary from person to person. In context of capital and risk , it is something that you will only be able to decide. However , you must not invest more than you can afford to lose. We know that higher the risk , higher the profits . But, instead of going by this rule alone , you should calculate the risk - reward ratio in order to close a better deal and generate good profits.

And since you have started trading ,trade in securities which are less risky and offer high returns. Always plan your everyday strategy and close the trading platform once you have achieved the target. Over trading is bad and leads to greed.
 
The big thing with risk is having the discipline to accept and take your losses.

A case in point is another thread where a trader went short GME and has refused to take a loss.

He was looking to pick up a few thousand and is now underwater 80K or so.

Interesting reading: "GME up over 100%...."
 
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