Hi,
In many forums, webpages there is the "golden rule"? about the 2%: do not risk more than 2% in a trade.
With demo account is easy: no problem if you wipe the account, because it is a reset, but how about live accounts?
I know the scalpers, or those who has more than 1 trade / day ( some has even 100) easy to keep it. What about in higher time frame?
In my case I am playing now with a demo account, but with the same money as I would invest ( if I would have enough experience and knowledge), so I am keeping much as possible real, and not scalping, especially at news releases. I had / have live account too.
I have decided to take only 1 trade / day. In this case I am forcing myself to be more patient and watch the chart more and enter in trade, when I believe "I know what is happening" and " I bet it will go in that way" and not let see if is going on that way ,if yes, than I will stay and if not exit
Unfortunately with demo account I don't have access to detailed access chart and I am lazy to write software or excel to calculate win-lose ration. I believe is above 70% win and 30% lose (around 80-85% if not even 90% win ratio ). Since 1 trade /day but the amount of trades are low now.
I am "playing" only with eur/usd, and 50 pip TP , SL.
Usually I get/lose 1.5% of capital /trade. Sometimes I put the second trade, when I am near PC for 20 pip and that is under 1% and once / week max.
I did a scroll up on trade logs and I saw a few over leveraged trades: got like 15% even 20% for this account a couple months ago / trade!
I am thinking Gerge Soros or Jesse Livermore do they kept the 2% rule?
Livermore wrote about he wiped his account, and retook trading. Also it is OK to do mistake but should let for you a second chance.
What about to risk 6% or even 10% of capital if the win-lose rate is 5:1 ? and only 1 trade / day?
EDIT:
I got the response for meHere.
In short: if you risk exactly the same as you take profit ( 50 pip SL with spread and 50 pip TP) and you have a probability of 51:49 the win and lose trade ration, than that is the optimal.
For 70:30 ratio it is unbelievable...40%!
I made some other calculation too.
The payoff based on risk shows a kind of parabolic? curve like presented here.
Until an optimum easily increasing, than decreasing a bit faster. At a certain point falls, crashing with very high speed.
The optimum depends on the percentage of the win lose trades ratio ( if the same amount gained as risked)
In many forums, webpages there is the "golden rule"? about the 2%: do not risk more than 2% in a trade.
With demo account is easy: no problem if you wipe the account, because it is a reset, but how about live accounts?
I know the scalpers, or those who has more than 1 trade / day ( some has even 100) easy to keep it. What about in higher time frame?
In my case I am playing now with a demo account, but with the same money as I would invest ( if I would have enough experience and knowledge), so I am keeping much as possible real, and not scalping, especially at news releases. I had / have live account too.
I have decided to take only 1 trade / day. In this case I am forcing myself to be more patient and watch the chart more and enter in trade, when I believe "I know what is happening" and " I bet it will go in that way" and not let see if is going on that way ,if yes, than I will stay and if not exit
Unfortunately with demo account I don't have access to detailed access chart and I am lazy to write software or excel to calculate win-lose ration. I believe is above 70% win and 30% lose (around 80-85% if not even 90% win ratio ). Since 1 trade /day but the amount of trades are low now.
I am "playing" only with eur/usd, and 50 pip TP , SL.
Usually I get/lose 1.5% of capital /trade. Sometimes I put the second trade, when I am near PC for 20 pip and that is under 1% and once / week max.
I did a scroll up on trade logs and I saw a few over leveraged trades: got like 15% even 20% for this account a couple months ago / trade!
I am thinking Gerge Soros or Jesse Livermore do they kept the 2% rule?
Livermore wrote about he wiped his account, and retook trading. Also it is OK to do mistake but should let for you a second chance.
What about to risk 6% or even 10% of capital if the win-lose rate is 5:1 ? and only 1 trade / day?
EDIT:
I got the response for meHere.
In short: if you risk exactly the same as you take profit ( 50 pip SL with spread and 50 pip TP) and you have a probability of 51:49 the win and lose trade ration, than that is the optimal.
For 70:30 ratio it is unbelievable...40%!
I made some other calculation too.
The payoff based on risk shows a kind of parabolic? curve like presented here.
Until an optimum easily increasing, than decreasing a bit faster. At a certain point falls, crashing with very high speed.
The optimum depends on the percentage of the win lose trades ratio ( if the same amount gained as risked)
I want to buy PATIENCE