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5% risk per trade?

  • #161
  • May 16, 2019 4:23pm May 16, 2019 4:23pm
I would advise to watch the ENDGAME... the whole picture... what RETURN can you BRING for what kind of TOTAL exposure... not neccessarly per trade...
if you can make CERTAIN returns... exposure is almost not relevant anymore...
I have even done a survey.... if you can make 900% return... so x10 of the deposit..
people are preparing to 100% risk... so you can do whatever you want... watch like CAT.. for the proper opportunity.. throw money in, get x10.. or you can
do a marathon of n-trades....

Yeah surely if you divide the trades you can potentially preserve more if things go south in certain trade due to various reasons..
but what is important is the endgame... RETURN-DD is important... 5%risk per trade would apply for certain RETURN-DD funds..
number/parameter alone doesnt tell much... outside of "general wisdom".... that says 2% risk per trade is the limit...

some funds/institutions have prescribed parameters like those... at least in limits... but for individual...
the important thing is what COMPONENT of trading you either have or not.. PRICE/TREND prediction, risk management...
RISK per trade certantly wouldnt be the FIRST number I would take a look at... it starts with RETURN, proceed to DD, no of trades, volume, timeframe... series of wins/loses....
Can you afford to take that chance?
  • #162
  • May 18, 2019 10:03am May 18, 2019 10:03am
Quoting NathanAstel
what percentage risk is comfortable when trading during news ?
No more than 5% is my rule for all trades
  • #163
  • May 19, 2019 4:19am May 19, 2019 4:19am
No more than 5% but only in solid trades (if there can be solid/sure at all). I prefer to use 1 or 2%.
  • #164
  • May 20, 2019 6:40am May 20, 2019 6:40am
1-2% risk is more comfortable for avoiding unfortunate risk and losses, but difficult to maintain this ratio at all times , because market moves at random most of the time.
  • #165
  • May 20, 2019 9:06pm May 20, 2019 9:06pm
The risk calculation depends on many factors of a trader. The calculation is different from one trader to another trader. Risk should be as low as we can have.
  • #166
  • May 23, 2019 5:01am May 23, 2019 5:01am
we always try to manage our risk as a low ratio but practically cant , because every faction is volatile and there is no one who can predict the real faction of this market with certainly.
  • #167
  • May 23, 2019 11:27am May 23, 2019 11:27am
Quoting Butterscotch
The risk calculation depends on many factors of a trader. The calculation is different from one trader to another trader. Risk should be as low as we can have.
And from a newbie to a pro
  • #168
  • May 23, 2019 11:34am May 23, 2019 11:34am
That is also true.
Different people, different levels of experience, different strategies, different obligations outside of forex, the variables are endless.
  • #169
  • May 25, 2019 2:33pm May 25, 2019 2:33pm
Quoting mlawson71
That is also true. Different people, different levels of experience, different strategies, different obligations outside of forex, the variables are endless.
Absolutely endless.
  • #170
  • May 27, 2019 5:31am May 27, 2019 5:31am
Quoting mlawson71
That is also true. Different people, different levels of experience, different strategies, different obligations outside of forex, the variables are endless.
Whatever, it is! 5% is always dangerous to use; since losing 3-4 trades in a row is very common! That means, 15-20% loss!!!
  • #171
  • May 27, 2019 5:35am May 27, 2019 5:35am
Quoting mlawson71
That is also true. Different people, different levels of experience, different strategies, different obligations outside of forex, the variables are endless.
yes , there is lot of difference among traders attitude and styles , so risk percentage depends on according to trading understanding. generally no way to keep consistency low risk ratio not possible in practical.
  • #172
  • May 28, 2019 6:56am May 28, 2019 6:56am
Risk reward to me is like story of fairies and goblins. You cannot know how much potential a trade will yield, you can only assume and building an acceptable risk to reward profile off of assumption is fools gold. The market is not rigid and why people think a rigid ratio is somehow applicable to a fluid market is a conundrum. Both stops and targets in a fluid market make no sense. A hard stop of say 5% should only ever be a last resort if things turn sour. The market provides an abundance of clues that your trade is at its end or never going to work which means if you trade with a hard stop of 5%, you should be looking to exit long before that ever materializes . The same applies to targets where the catalyst that started the move loses energy over time and when you see it struggling to break a level, then the trade is basically done. So trading with 5% risk as an absolute last resort is not really an issue because you should be gone long before it is hit. Likewise for targets, you should look to be adapting your exit strategy based on momentum of price and its ability to break through levels. With this approach 5% is not really an issue and your target could be any ratio of your ultimate risk but set by the market, not you.
  • #173
  • May 29, 2019 6:23am May 29, 2019 6:23am
Quoting EcoTrader
Risk reward to me is like story of fairies and goblins. You cannot know how much potential a trade will yield, you can only assume and building an acceptable risk to reward profile off of assumption is fools gold. The market is not rigid and why people think a rigid ratio is somehow applicable to a fluid market is a conundrum. Both stops and targets in a fluid market make no sense. A hard stop of say 5% should only ever be a last resort if things turn sour. The market provides an abundance of clues that your trade is at its end or never going to...
Well; if you get an opportunity like 30% even more by 5% maybe then it’s okay! But using this perfect as regular basis is a problem!
  • #174
  • May 29, 2019 7:19am May 29, 2019 7:19am
Quoting Adelhard
{quote} Well; if you get an opportunity like 30% even more by 5% maybe then it’s okay! But using this perfect as regular basis is a problem!
That depends on your trade management approach. Rigid stops and targets is not the most optimal way to manage a trade. In that framework, yes it is not a good idea to persistently risk 5%. There are many ways to manage trades and nothing is standard across all. In other words 5% persistently when using a rigid system is not a good idea but it doesn't apply to other ways of trade management.

A stop should only ever be a last resort. The market gives plenty of feedback to guide you to an orderly exit.
  • #175
  • May 31, 2019 11:11am May 31, 2019 11:11am
My approach is to risk a set dollar amount per $100 of account balance. Right now it's $5 per $100. Once the next $100 level is reached I increase the amount by $5. If my account dips back into the previous $100 level I drop back down. Once my account get's into the $1,000s I will re-evaluate the set dollar amount I am risking and go from there. Once trades are at 1:1 I reduce my risk in half (I try not to ever take a full risk loss) and then I trail my stops at the reward levels. So once price closes past 2R I move stop to 1R, etc. Depending on price action and chart structure I will set a take profit at a key level but I try to let the market take me out and ride the trends for as long as possible. Doesn't happen all the time but catching a nice 1:5 or greater is awesome and that will never happen if you cut trades off too soon.
Emotion - it steals your money.
  • #176
  • May 31, 2019 11:30am May 31, 2019 11:30am
Quoting EcoTrader
{quote} That depends on your trade management approach. Rigid stops and targets is not the most optimal way to manage a trade. In that framework, yes it is not a good idea to persistently risk 5%. There are many ways to manage trades and nothing is standard across all. In other words 5% persistently when using a rigid system is not a good idea but it doesn't apply to other ways of trade management. A stop should only ever be a last resort. The market gives plenty of feedback to guide you to an orderly exit.
I got your point! Basically, everyone has own plan & strategy; my strategy doesn't allow me to use more than 2% risk.
  • #177
  • Jun 1, 2019 5:11am Jun 1, 2019 5:11am
Are you talking about 5% of lose off every trade?
  • #178
  • Jun 2, 2019 7:14am Jun 2, 2019 7:14am
Quoting LanaBanana
Are you talking about 5% of lose off every trade?
5% of the capital risked in every trade.
  • #179
  • Jun 4, 2019 1:30pm Jun 4, 2019 1:30pm
Quoting momo3HC
{quote} 5% of the capital risked in every trade.
Is that for example... taking 5% from your balance and EXPOSE it all in one trade... (So if you have 100EUR, you use 5EUR to place an order and be ready to go to 0)
Or are you talking about placing the whole balance in a trade and have stops set at -5%? (So fi you have 100EUR, you use the whole 100EUR to place an order and be ready to go -5% max)
Can you afford to take that chance?
  • #180
  • Jun 4, 2019 1:44pm Jun 4, 2019 1:44pm
If you have 500$ account and you want to grow it fast, is okay to trade 5% per trade, but in my opinion, if you have 10.000$ account, you can't risk 5% because is too much. 2-3% if you have a bigger account.
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