5% risk per trade?

I think 5% is too big of a risk, especially for people with smaller account sizes.

I think the opposite is true For example, people with smaller account sizes that are trying to EARN big.. what do they do, they place MASSIVE risk..
And splitting trades might not be a guarantee to be more profitable, not by itself.

For example... If you can make 10% return per year... with let's say... 5%DD.. That would be considered GOLD for Institutions etc... Hedge funds also etc..
But if you have small account size, let's say 1k EUR/USD.. and many have much much less than that.. And you could make 10% return.. that would mean absolute return of 100EUR/USD per year... That is nothing, not even worth your time in front of a computer, because as someone said in this forum, he has 250% return over I think 10+years.. buth the absolute return (in absolute money) is a few cents per hour! He would be better of flipping burgers, at least some hours per week

Ok back to example... And if you can make 10% return, 5%DD, but REAL return, not just one or few lucky massively leveraged trades. But within this "alpha" paramters, so that it is clear that it might not be one or few lucky strikes... You are either natural talent, wizard or did spend a lot of time "learning".. If this skill is learnable at all is another subject, at least in classical sense. Would you be good with 10% return, 100EUR. Obviously not. You would have to put serious money to leave from it and to be prepared for risk, times when trading is not good... If you can live on 1k EUR you would need 100k+ account size to get that amount. And 10% with 5% is not exactly easy, consistently, year after year... And it will take some time, some trades to climb to 10% return if you are risking "only" 5% per trade...

So what do traders do.. They risk 50%+ per trade.. many many times over... Because if you want to build a capital to 100k+ to be able to afford low-risk trading, you would need to roll let's say, 1k deposit, a lot of times... 9900% return neded.. and how can you expect to climb there with 5% per size?
Or if you would have 10k deposit.. you would still have to have at least 100% return... to live directly from profits.

So as you see, many traders here are forced to risk it all that is why there are many blow accounts, it is just worth it to them. Worth the risk.

I also say that, the opposite as you say, that 5% is too big for LARGE account sizes.. but TOO little for small/micro accounts, except for learning or some play, pocket money.. I have different accounts, strategies.. Mainly I divide between FUND.. when I would be conservative and there is BURNER fund.. when 100% is expected to expose, but also the potential is massive... The later would also be a "CAT/hunter" strategy... wait for the right opportunity and then hunt for the hill... You can make massive profits per trade but only if you risk it massively also

Something like that... I would also say that one paramter alone is very hard to judge, we have to have at least a few...
5% risk per trade for what, what account size, volume, what is the objective..

Unless of course someone finds holy grail, risking 5% per trade for 50% return... and be profitable... Please msg me asap if you can make that happen, somewhat consistently.. so we can "tune" it a little on "parralel" setup and become rich fast

Yeah I risk more than 5%, just have to keep the SL more tight

To each their own. I could never do that, but if it works for you then more power to you.

I see trading a little like poker
if you get great cards(set up) it is ok to risk more - but only if you know the stats

Don`t want to offence you but you`ve got a lot more to read about forex.

You do realise the difference although risk per trade is the same?

5 % risk per trade is too much. max. risk percentage can be 2%.

This all comes down to your personal risk profile.

I know people who risk 0.01% max, and do very well. And others that do 2-5% and also do remarkable.

4 losses of 5% doesn't equal 20% . The equity is gradually lowered and risk % is based on current equity not starting equity.

If you trade a high risk return model, you are much better off lowering % risk since often is winrate lower. If your model is high winrate a higher risk % is more plausible.

But beware of the psycological effects of losing 5% a couple of times. And see your equity plummet.

Practice perfect.

/ J

without Stoploss you will burn your account anyday.

Absolutely; there is no way without stop loss trading tool! Because, money management is the key!

Never mind.

That’s the point! Trading without SL is not normal! There is no guarantee!

at least in Forex!

2% or 3% risk is okay if you are doing well in trading but taking 5% risk with any trade can be risky for your capital.

I agree, 5% is a bit too much for my taste too.

percentage is just a prediction but we have to make sure realistic prediction , emotional prediction always harmful for better trading and this policy make us greedy and loser particularly for beginners level.

It is like talking about spice without time... we should talk spicetime...
5% risk per WHAT trade (strategy)? Some people are HF traders... or programmers/engineers of such programs...
Some strategies are about waiting like a CHEETAh or SNAKE... and ATTACK once the opportunity arise... For example...
Since trump took office, we got some completely new type of trading... TWEETER TRADING... TRUMP STYLE...
There is one strategy that uses that So they WAIT.. and when the opportunity arises... they ATTACK full force, it goes beyond 5%...
Also... this "RISK per trade" doesn't do much protection in the longrun, the most it can do is that you will lose money slowly (if the RATE is also slow)...
So it is also important how many trades you make... and some other parameters, otherwise we do not know what we are talking about...

But in a more general sense... Some institutions would go nuts if you riske 5% per TRADE.. and there are many trades...
specially if they guarantee clients that they will preserve 90% of their assets... that would mean that with ONE TRADE.. and a little more than 2 trades... 10%+ is WIPED... no more trading.. if you promissed to preserver 90%... Also it depends if you are trading your own money, pocket change?
If so, 5% might not be much.... because if you start with 100USD... you wont get far if you make/risk just a few 5% trades per month/year...

So would like to know... account size, prop trading or for someone else... how many trades... frequency... etc...
with 100USD deposit... just watch that you have the JUICE... and depending on strategy... ATACK as mofo.. or split the trades... to (frequent) fractions..

The endgame is, there are no fixed answers in FX If we could DERIVE one constant.. we would have the EDGE.. that would make us billions over time
The only thing we might have, apart of the "chaotic" rules (work some of the time) are the INVESTORS RULES about their money risk management that could also limit our trade potential....

But if you check the probabilities... chance to TP or SL... if they are not 1:1.... and than chance in overall picture... after trades... and what is the probability, overall... better to win/lose if you risk 1-2% instead of 5%... you might be surprised with the results

thanks for your nice post including lot of information ,
acquired something new knowledge and experience.