Risk Management: Stock

.sigma said:
How do you guys approach risk with stock trading?

Lets say you had a $10,000 account and trade <$10 stock price.

How much per trade would you allocate to each trade?

I know this depends on % goals and trading style, but just in general how much % of 10k would you trade each position with?
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notagain said:
55% win rate common to trading and sports betting
https://www.soccerwidow.com/footbal...osing-streaks-optimal-bankroll-sport-betting/

https://www.soccerwidow.com/footbal...y/science-calculating-winning-losing-streaks/
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The question before this question is how to establish an expectancy, if your method has negative expectancy, it is a moot point.

Expectancy = (probability of win) x (win) + (probability of loss) x (loss)

If it is negative, you will be wiped out. Trade small and trade often (tastytrade preaches this) only means you will be wiped out slowly but surely.

Once you know your expectancy, it is easy to calculate your Kelly and fractional Kelly, then trade accordingly.

I am relatively new to trading but was able to establish my expectancy after a couple of years. Surprisingly the average hasn't change that much over the years.

My win rate? ~ 40%.
 
.sigma said:
How do you guys approach risk with stock trading?

Lets say you had a $10,000 account and trade <$10 stock price.

How much per trade would you allocate to each trade?

I know this depends on % goals and trading style, but just in general how much % of 10k would you trade each position with?
More...
It depends on how much you want to risk and your strategy. If you have good setup forming risk 5% and less accordingly to the setup
 
cornerstone said:
It depends on how much you want to risk and your strategy. If you have good setup forming risk 5% and less accordingly to the setup
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Exactly, there is no exact universal way with which we can manage our risk. Rather it varies with the type of strategy and trading plan.
 
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