The myth of letting your winners run

[virtusa]

I also have a question of what is a good amount of risk per trade.

First calculate the expectancy of your system. That should give you an indication of what you can risk per trade.

(Win % x Average Win Size) – (Loss % x Average Loss Size)

 

[Buy1Sell2]

Mark Douglas said that 95% of Dennis' trades were losers, but the winners were monsters.

I also have a question of what is a good amount of risk per trade. I have heard from between 1 to 15%. The crazy thing is that the guy I was learning from (on a forum) said to use from 5 to 15% which is way too much IMO. Any advice is appreciated. Also thank you to Buy1Sell2; I have learned a lot from your posts.

No more than 2 percent of TLNW

 

[nickiewinters]

Mark Douglas said that 95% of Dennis' trades were losers, but the winners were monsters.

I also have a question of what is a good amount of risk per trade. I have heard from between 1 to 15%. The crazy thing is that the guy I was learning from (on a forum) said to use from 5 to 15% which is way too much IMO. Any advice is appreciated. Also thank you to Buy1Sell2; I have learned a lot from your posts.

5% -15% is insanely high. Besides making profits, capital preservation is also very important. Here’s a rough calculation, if you risk 2% per trade, it will take 50 losing trades to wipe your account. However by risking 5 or 6% you will blow your account just after 4 losses.
I never risk more than 3% per trade but many traders I know prefer to follow the 1% rule. I think it’s good to keep the value somewhere between 1 to 2% and adjust it before every trade.