You should never ever risk more than 2% of TLNW

Do you use prudent risk management?

  • I risk no more than 2% of TLNW on any one trade/idea

    Votes: 15 18.3%

  • I risk more than 2% of TLNW on any one trade/idea

    Votes: 18 22.0%

  • I risk no more than 2% of my account balance on any one trade-idea

    Votes: 14 17.1%

  • I risk more than 2% of my account balance on any one trade/idea

    Votes: 31 37.8%

  • I really don't know

    Votes: 4 4.9%
  • Total voters
    82
Quote from atticus:

This thread is nonsense. LIBOR is at 50bp and the average 401k is approx. 45% invested in equity product. They're risking more than 2% of TLNW, which is a ridiculous metric.
More...

401k's are not trading vehicles that have the availability of margin. At least not for the majority. What we are discussing are trading accounts. Apples and Oranges.

Also, 401k's took large hits due to the inability of the average joe to use prudent risk management. ie diversity, age , getting out etc.
 
Quote from Buy1Sell2:

401k's are not trading vehicles that have the availability of margin. At least not for the majority. What we are discussing are trading accounts. Apples and Oranges.
More...

Where was "trading account" and "margin" mentioned?
 
Quote from Buy1Sell2:

The ET site is advertised as the #1 site for active traders.
More...

So you never trade in correlated instruments in which your loss can exceed 2% of your TLNW? Bullshit.
 
Quote from atticus:

So you never trade in correlated instruments in which your loss can exceed 2% of your TLNW?
More...

I never ever do on any one trade/idea. I recognize that many 401k'ers do, but I posted this on a trading site and thought that it was a given that we were discussing trading.
 
Quote from Buy1Sell2:

Traders should never ever risk more than 2 percent of TLNW (Total Liquid Net Worth) on any one trade/idea. --Ishmael:)
More...

You have not supported this claim with any evidence.

Why not 1%? Why not 3%?
 
Quote from smilingsynic:

You have not supported this claim with any evidence.

Why not 1%? Why not 3%?
More...

It's just experience and common sense. Once you start exceeding the 2 percent level, you greatly limit the number of trades that you can make before you may have to close up shop. I have no problem with 1 percent by the way. I think we need to look at the fact that most traders lose and get out of the business. The main reason is that they do not control risk. It doesn't have to do with good entry or exit systems. It simply has to do with not having good, prudent risk management. "The trader that loses the least, makes the most money in the long run"--Izzy:)
 
i'm not sure if i understand the point of the poll. the size of the trading account will always be less than the tlnw. so 2% of trading account is always less than 2% of tlnw. correct?
 
Quote from Buy1Sell2:

I never ever do on any one trade/idea. I recognize that many 401k'ers do, but I posted this on a trading site and thought that it was a given that we were discussing trading.
More...

My point is that most everyone here doesn't understand the first thing about correlation.
 
Quote from atticus:

My point is that most everyone here doesn't understand the first thing about correlation.
More...

and, quite possibly, prudent risk management. It's best to err on the conservative side don't you think?:)
 
You must log in or register to reply here.
Back
Top