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5% risk per trade?

  • #101
  • Feb 18, 2017 5:07pm Feb 18, 2017 5:07pm
Hello,

I follow some professionals traders and they take maximum 1% of risk on their books to be able to support several looses.
Often with a very low leverage like 1:5 and not 100 or 500 like some brokers offers. It's important to focus on a small but repetitive win than making quick return on investment.
BetaPipsTP2SL5 All Time Return: 4.6%
  • #102
  • Feb 19, 2017 1:40am Feb 19, 2017 1:40am
Quoting PFisherman
Hello, I follow some professionals traders and they take maximum 1% of risk on their books to be able to support several looses. Often with a very low leverage like 1:5 and not 100 or 500 like some brokers offers. It's important to focus on a small but repetitive win than making quick return on investment.
Yes, 1% - 1.5% per position is the correct way to go. That's how I do it and all my fellow traders do the same. Some of them even consider 2% per position as large, as they have a large capital base and some of them go as high as 40-50 standard lots (EUROS) in 1 position during period of high liquidity and so 2% per position is kind of relatively large for them in terms of absolute money value. If you are already following some professional traders in terms of advice, do follow their opinions about the 1%-1.5% rule and low leverage as this is how most of professionals manage their risk.
  • #103
  • Feb 20, 2017 7:03am Feb 20, 2017 7:03am
I'm following their advices on that. I clearly understood that making money fast is the best way to loose everything. 1% risk taken with a good money management can definitively bring you to a good return on investment on a long term. More you grow your portfolio and more you are able to leverage it.
With a low 1%, you can expect to have a small risk of ruins and if you reach a bad period with several looses you will minimize your drawdown
BetaPipsTP2SL5 All Time Return: 4.6%
  • #104
  • Feb 20, 2017 9:31am Feb 20, 2017 9:31am
I better suggest risking that sum of amount only which we can afford to loose..
  • #105
  • Feb 20, 2017 10:27am Feb 20, 2017 10:27am
In all case, what you put in forex is what you can effectively afford to loose. But if we can avoid loosing it when you trade, can be cool !
BetaPipsTP2SL5 All Time Return: 4.6%
  • #106
  • Feb 20, 2017 12:09pm Feb 20, 2017 12:09pm
Quoting scalprobot
It seems logical that the lower % risk you take per position, the longer you can be in business. Small and steady does it.
Yes it looks good on paper but you have to expect more wipe outs if you trade large > 4-5%

After a 5% loss you need to actually make MORE than 5% profit gain to break even.

eg an extream example- 50% loss needs a 100% gain to break even.

$1000 Account -50% = 500
$500 Account * 100% = 1000 ???

There are times you can trade large size. I started a thread on trading comps where the only real way to have a good chance of winning is to trade badly (large size) and risk your whole account as you dont win with a 20%-50% profit, you win with a 100%+ .


Its a little like playing poker at a single table local game VS playing in a knockout tournament. Same game different tactics.
  • #107
  • Mar 1, 2017 9:12pm Mar 1, 2017 9:12pm
risks in forex it is necessary to always to be able to execute trades with already able to have maximum capability, we can also target risks by installing SL and TP, secondly it will help in the risk and profit targets for limiting each pips
  • #108
  • Mar 13, 2017 7:14pm Mar 13, 2017 7:14pm
Quoting Darknet
{quote} Yes it looks good on paper but you have to expect more wipe outs if you trade large > 4-5% After a 5% loss you need to actually make MORE than 5% profit gain to break even. eg an extream example- 50% loss needs a 100% gain to break even. $1000 Account -50% = 500 $500 Account * 100% = 1000 ??? There are times you can trade large size. I started a thread on trading comps where the only real way to have a good chance of winning is to trade badly (large size) and risk your whole account as you dont win with a 20%-50%...
You ALWAYS have to win more than you lose !! ALWAYS !! its something called "risk to reward" ratio.. where the reward MUST be higher than the risk !!!

example: win 2 times the Stop loss (1:2 risk/reward)


You REALLY need to understand the basics of Risk/Money management, man no offense
  • #109
  • Mar 21, 2017 9:19pm Mar 21, 2017 9:19pm
the risk would have been better it could be that we know how better to be managed, because of the risk that could hinder the running of trading in order to gain an advantage, and for it to do in the learning process in a demo account to be able to manage MM and RM with good order able to survive in the forex trading
  • #110
  • Mar 23, 2017 11:14pm Mar 23, 2017 11:14pm
I do not take high risk for my capital because handling it on risky time is not safe for money So i always go for around minimum risk between 1 or 2% is enough.
  • #111
  • Mar 24, 2017 6:20am Mar 24, 2017 6:20am
Quoting Butterscotch
I do not take high risk for my capital because handling it on risky time is not safe for money So i always go for around minimum risk between 1 or 2% is enough.
Risking small amount of money ensures profit but the profit ratio can be small as well, so better to earn small profits on consistent basis.
  • #112
  • Apr 2, 2017 8:21am Apr 2, 2017 8:21am
5% is too huge imo. Being a beginner, I use <1% of my equity in all my trades. This will slowly help me overcome my emotional hurdle. You can start big, but be reminded that the loss you have to take!
  • #113
  • Jul 18, 2017 11:09am Jul 18, 2017 11:09am
This is high risk reward ratio for me, because I get only 65-68% success ratio from my personal trading strategy! This is way, I use only 1% risk reward ratio in my trading! I have a plan to increase this ratio only, when I will be able to increase the accuracy of my strategy.
  • #114
  • Jul 19, 2017 5:11am Jul 19, 2017 5:11am
To be honest, 5% is not possible for me! Because, my trading capital is too small! On the other hand, till now I am learning and updating my trading skill! So, right now I am working with 2% risk in my per trade! Besides, I always try to use high profit ratio, it helps me to get back my losing pips. Yes, 2% is a fixed risk ratio for me.
  • #115
  • Jul 19, 2017 2:46pm Jul 19, 2017 2:46pm
Due to small balance I always have to depend on scalping . so I think 5% risk is not tolerable for me when scalping. 2-3% risk is more appropriate to the concept of trading that I always use.
  • #116
  • Jul 19, 2017 3:39pm Jul 19, 2017 3:39pm
Quoting MitchellMcC
Due to small balance I always have to depend on scalping . so I think 5% risk is not tolerable for me when scalping. 2-3% risk is more appropriate to the concept of trading that I always use.
LOL. Scalping contains huge risk even though it brings profit very rapidly than others trading techniques.
So I don’t know how you trade with 2-3% when scalping ?
  • #117
  • Jul 19, 2017 4:22pm Jul 19, 2017 4:22pm
What percent risk in your per trade it’s not depend on what strategy you are following , according to me I think it is completely depends on the ability money management. If anyone can ensure a great money management plan he ll get maximal result by using any kinds of trading strategies.
  • #118
  • Jul 20, 2017 7:21am Jul 20, 2017 7:21am
I keep circling back to account management being critical in ones trading.

I like to qualify what I say with real-world examples, so I trade around 0.25% risk and have traded as high as 2.25%. I do find it ironic people asking me this and then I ask what their stop management is and why, they can't tell me. How do you know how much you are willing to lose on a trade if you don't know what that point is in the future.

0.5% risk with a 2:1 R:R is my setting.
In life you get 3 types of people, those who can count and those who can't.
  • #119
  • Jul 20, 2017 12:26pm Jul 20, 2017 12:26pm
I think 5% can be done depending on the trading strategy. 1-2% is usually thrown out there for beginners because they don't know very much about what to expect from their strategy, so it helps to not risk more than that to prevent them from blowing up before learning how to trade and what kind of drawdown to expect from their system.
  • #120
  • Jul 20, 2017 12:48pm Jul 20, 2017 12:48pm
Quoting Madinvestor
I think 5% can be done depending on the trading strategy. 1-2% is usually thrown out there for beginners
With respect YOU ARE A MADMAN.

The trading system we use delivers about an 83% strike rate. Which means its wrong 17% of the time. You are aware of the probability of flipping heads or tails on a coin at 50% DOES NOT MEAN your probability of hitting tails increases if you flip the coin to heads 5 times in a row. (Also called the Monte Carlo Fallacy)

I can find 15 days in my journal easily where I had 10+ losers in a row. In a day. @ 5% thats my account halved. And you believe this is acceptable risk??
In life you get 3 types of people, those who can count and those who can't.
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