How much we should risk per trade with 1:500 leverage | Forex Factory

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How much we should risk per trade with 1:500 leverage

  • Poll

  • How much do you risking per trade
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  • #1
  • First Post: Edited Dec 3, 2016 11:22pm Nov 29, 2016 10:57am | Edited Dec 3, 2016 11:22pm
I didn't used stop loses, because of that i vanished few Forex accounts.

I'm currently trying new strategy with
Broker: FXTM
Currency: USC
Leverage: 1:500 leverage
Balance: $1000
TP: 40-60 pips
SL: 40 pips
BE: 2 pips after 25 pips
Strategy: Pivots
Pairs: EURUSD, GBPUSD
Risk: 4%

-The purpose of this tread is follow my strategy correctly with SL, also i like to discuss ideas and experience about how much risk we should take for a one trade to avoid burn whole account after string of losses.

-Hope someone help help this for avoid vanishing their account as mine by trading without Stop losses.

-Please vote for the poll too.
Failure is not failure if you learn from it...
  • #2
  • Nov 29, 2016 11:25am Nov 29, 2016 11:25am
How about lowering the risk? You say that you blown few accounts with that, so it is not a good approach, don't you think?
  • #3
  • Nov 29, 2016 11:29am Nov 29, 2016 11:29am
Quoting suneth2
I'm currently risking too much per trade, because of that i vanished few forex accounts. I like to know from profitable traders how much do you normally risk per trade with high leveraged account. And hope we can share some knowledge about Risk on here
Perhaps you should back to demo to think clearly instead blowing another live account. Treat demo as real money and gain many pips with low drawndown , if your drawndown too big you are on the other side of the trend . Use Pip count as your parameter . Example minus 1000 pips would put an account on margin stop. So it's important to know your drawndown
  • #4
  • Dec 2, 2016 11:28am Dec 2, 2016 11:28am
2 votes for 3%-5% anyone else like to share Risk % with us
Failure is not failure if you learn from it...
  • #5
  • Dec 2, 2016 11:44am Dec 2, 2016 11:44am
On this NFP, I had a 200 USD account and risked 17% which basically means 0.10 lots. If it went against me 300 pips that means I have a -30$ loss, but it didn't. I didn't use any SL because its useless. But I profited since I have a news trading system of course. Lowering risk not only helps reduce stress, but organizes your mindset as well. But for example, there are very experienced traders who risk it all because they're very familiar, or in general, know whats going to happen in the future. I'm not saying I'm one of them but if you want to earn money, start small, not big. Small profit eventually pile up.
  • #6
  • Dec 2, 2016 11:46am Dec 2, 2016 11:46am
And second, you have a very small account. You can't hedge, swing or hold trades with that amount. Eventually, that strategy is NOT going to help your account.
  • #7
  • Dec 2, 2016 9:48pm Dec 2, 2016 9:48pm
Quoting Noorx
On this NFP, I had a 200 USD account and risked 17% which basically means 0.10 lots. If it went against me 300 pips that means I have a -30$ loss, but it didn't. I didn't use any SL because its useless. But I profited since I have a news trading system of course. Lowering risk not only helps reduce stress, but organizes your mindset as well. But for example, there are very experienced traders who risk it all because they're very familiar, or in general, know whats going to happen in the future. I'm not saying I'm one of them but if you want to earn...
Thank You for idea
Failure is not failure if you learn from it...
  • #8
  • Dec 3, 2016 12:00am Dec 3, 2016 12:00am
Lets say you have $1000 balance using 500:1 risk 3%

This will make your sl approx. only .6 pips. How often do you think you will be stopped out? Maybe will be taken out by the spread.

Compared to risk 3% using 1:1 leverage you can have a sl of 300 pips.
20 Pips a day keeps centerlink away
  • #9
  • Dec 3, 2016 12:38am Dec 3, 2016 12:38am
In the first place, you shouldnt even be trading at such high leverage!
  • #10
  • Dec 3, 2016 12:43am Dec 3, 2016 12:43am
Quoting PaulDaemon
Lets say you have $1000 balance using 500:1 risk 3% This will make your sl approx. only .6 pips. How often do you think you will be stopped out? Maybe will be taken out by the spread. Compared to risk 3% using 1:1 leverage you can have a sl of 300 pips.
My current strategy EUROUSD stop lose is 40 pips, When i use Forex calculators with 3% Risk, those shows i can trade with 0.07 lots with $1000 account, But those calculators not have field for enter leverage.

My current understanding 3% Risk can protect our account from 30 loses in a one row,

Can you explain or share some article how this risk relate with leverage we used, if i use high leverage can't that protect from 30 loses in a one row
Thanks a lot
Failure is not failure if you learn from it...
  • #11
  • Dec 3, 2016 1:00am Dec 3, 2016 1:00am
Quoting suneth2
I didn't used stop loses, because of that i vanished few forex accounts. I'm currently trying to identify good risk % for apply my new account. I like to know from profitable traders, how much do you normally risk per trade with high leveraged account. Hope we can share some knowledge about Risk on here...
I think you try to find the solution in the wrong place. If you failed with SL maybe your entire strategy was wrong. Maybe you wasn't able to wait for the perfect entry and jumped in too often, maybe you extended SL when the price was already against you, I don't know. But I think if you really want to leave out SL you have to do it with very small percentage, especially at 1:500. You can be lucky and make really large money, but do your homework, find a GBP pair, find the largest spike in last week on your timeframe, and calculate how much would you loose, if you are with 5% on the wrong side. I am a beginner, so have your doubts about my opinion
Only my scepticism keep me from being an atheist. Be sceptic ever.
  • #12
  • Dec 3, 2016 2:06am Dec 3, 2016 2:06am
Using a stop loss is imperative. Base it off market structure, and then size the trade based off the percentage you'd be comfortable losing. Ie: 2% of 1000 = 20, if you have a 40 pip stop then you need to be at .50c/pip or a 50,000 size trade. That is more like 1:50 leverage than 1:500. Obviously you have to tweak this for your strategy, but if you're entering trades where there is a high expectancy of your stop loss being hit, then you have to rethink some things. Your stop loss needs to be past the last swing, so that you get stopped at the point that the trade is definitely wrong, and not before, and certainly not after when the loss just gets bigger and bigger. And don't fight momentum. Look to find reversal points, understand how the market trends, consolidates, and reverses.

Also, I'm not sure leverage is being fully understood here. The amount of leverage you actually USE is the size you are trading relative to your account size. Just because you CAN trade 500x the amount of money you have doesn't mean that you SHOULD. Your broker is not forcing you to put a gun to your head and margin to the hilt - though most people can't resist the "opportunity."

Reality is that the larger size you trade relative to your account, the more a toll it takes you on psychologically. At maximum leverage, performance errors will kill an account.
  • #13
  • Edited 2:47am Dec 3, 2016 2:24am | Edited 2:47am
It very much depends on your win rate, also a RR of 1:>1 is essential when using high leverage.
  • #14
  • Dec 3, 2016 3:49am Dec 3, 2016 3:49am
How can you set your risk if you don't use stop loss?
"You may say I am a dreamer .... but I am not the only one."
  • #15
  • Dec 3, 2016 4:08am Dec 3, 2016 4:08am
Quoting suneth2
{quote} My current strategy EUROUSD stop lose is 40 pips, When i use Forex calculators with 3% Risk, those shows i can trade with 0.07 lots with $1000 account, But those calculators not have field for enter leverage. My current understanding 3% Risk can protect our account from 30 loses in a one row, Can you explain or share some article how this risk relate with leverage we used, if i use high leverage can't that protect from 30 loses in a one row Thanks a lot
1 standard trade is calculated using $100,000, 1 lot, 1:1 leverage. So on a $1000 balance using 1:1 leverage lot size will be 0.01. On $10,000 1:1 leverage 0.1 lots.
3% of 1000 is 30 so a sl of 300 pips can be used. Now trading with $1000 using .07 lot size is equal to 7:1 leverage so risking 3% sl should be around 40pips.

3% of 1000 is 30. to get the sl size 30/.07 = 428 points or 42pips. However this is a round about figure as different currencies have different pip values.

I just use a regular calculator and a bit of basic maths to work it out. At first its a bit confusing but the more you do it without a pip calculator the better, you will have more understanding of it.
20 Pips a day keeps centerlink away
  • #16
  • Dec 3, 2016 6:09am Dec 3, 2016 6:09am
Quoting suneth2
{quote} Thank You for idea
Friend, you haven't understood my post the slightest. I'm quoting myself again.
Quoting Noorx
And second, you have a very small account. You can't hedge, swing or hold trades with that amount. Eventually, that strategy is NOT going to help your account.
  • #17
  • Dec 3, 2016 9:52pm Dec 3, 2016 9:52pm
Quoting Noorx
{quote} Friend, you haven't understood my post the slightest. I'm quoting myself again. {quote}
It's a $1000 cent account for testing purpose.
Failure is not failure if you learn from it...
  • #18
  • Dec 4, 2016 6:53am Dec 4, 2016 6:53am
Quoting suneth2
{quote} It's a $1000 cent account for testing purpose.
For god's sake, if you can't appreciate $802 then you can't manage risk. You can open a cent account trading only 50$ on FXCM... you don't need $1K!
  • #19
  • Dec 4, 2016 7:33am Dec 4, 2016 7:33am
Quoting Noorx
{quote} For god's sake, if you can't appreciate $802 then you can't manage risk. You can open a cent account trading only 50$ on FXCM... you don't need $1K!
No mate i deposited $10, it shows 1000 because cent account multiply our deposit by 100
Failure is not failure if you learn from it...
  • #20
  • Dec 8, 2016 10:04am Dec 8, 2016 10:04am
Quoting TraderSing
In the first place, you shouldnt even be trading at such high leverage!
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