Hi,
I risk 3% of my Account Balance on all trades, and calculate my position size with the stop loss.
But it seems there's a problem with that.
For example, lets say I have a trade with a wide stop of 100 pips. At 3% Risk, the position size is 0.3. This trade makes 150 pips, making a profit of up in $450. Good.
Now I have another trade that has a stop of 30 pips. At 3% Risk, the position size is 1 lot. This trade hits the stop loss, losing $300.
150 pip gain is almost undone with a 30 pip loss. I see that very often.
Does any one see a problem with this approach? Is it wrong to calculate position size with fixed % risk and stop loss? How do you guys handle this problem?
Thanks,
JForex.
I risk 3% of my Account Balance on all trades, and calculate my position size with the stop loss.
But it seems there's a problem with that.
For example, lets say I have a trade with a wide stop of 100 pips. At 3% Risk, the position size is 0.3. This trade makes 150 pips, making a profit of up in $450. Good.
Now I have another trade that has a stop of 30 pips. At 3% Risk, the position size is 1 lot. This trade hits the stop loss, losing $300.
150 pip gain is almost undone with a 30 pip loss. I see that very often.
Does any one see a problem with this approach? Is it wrong to calculate position size with fixed % risk and stop loss? How do you guys handle this problem?
Thanks,
JForex.