5% risk per trade?

For my clients we advise 1-3% risk. Now when I started trading I was doing a swing trading strategy trading 2-4 times per month at 10% risk per trade. I was gaining 100% per month consistently for only 4 trades per month but it messed me up.

the mentality of “I can’t reduce my risk now or I’ll miss out on more money” or if you’re in drawdown the thought of “if I reduce my risk now I can’t make back what I lost” etc. It’s just mind games.

drop the risk, lower your emotional attachment and think long term gain not short term get rich quick.

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

when making a losses
we always try to recover by over trading
and then risk ratio remain up to 10-15%. at last we fall a great trouble.

Revenge trading is such a counter-productive practice and so many traders engage in it, especially newbies.

in my opinion it is too big. because I only risk my trading a maximum of 2% per position. it's very safe to open a maximum of 5 positions. we cannot charge one position and release the opportunity for another more profitable position

I think 5% is too big of a risk for most people.

Of course, it is! That mean, we can lose 15% of our capital (consistent 3 SLs) at anytime!

i dont think so, 5% risk is not big at all, if you can manage this risk with discipline , of course this ratio is sustainable.

To each their own, I guess.

I totally agree with this. It's all about money management and the mind set we have. Never be GREEDY. Thank you!!

ok, 5% risk per trade. That is a good criterion. but doing so R: R ratio will decrease gradually

Do you use that percentage then?

In my purely subjective opinion, 5% is too much. 3% is where I draw the line. Although, let's assume you are making a consistent profit at 5% then, in time, would you be willing to go beyond 5%?

It also comes down to deposit size... People usually blow accounts since they risk with smaller deposits, like 100USD or something... and of course, they realise, if they would be aiming for returns that most (hedge) funds would die for... like 30% (annually) they would go nowhere, since they would make 30USD per year, in absolute terms... So what do they do? They risk it a lot in hopes to roll 100USD till at least 100k Without providing additional parameters/objectives, I do not see 5% risk per trade out of the question, since all is on the table... For example... You could already be in (much) profits... say you started with 10k.. and you wanted to get to 30% return, per year... but you are at 50% already... And on top of it, you see some great/epic opportunities that might happen only once per... and why not risk 5% of it since it would be from already made profits? But if you started with like 100k and you would be risking 5% (in the beginning - meaning, risking into the original deposit), that would be quite an exposure... unless you would be almost "not uncertain" So it is about the whole picture... And I understand many traders would like some isolated parameters/constants... that they could then combine together into money printing machine, but I am afraid everything should be viewed as a whole picture, in tune with the overall strategy, exposure, goals etc... otherwise you know what might happen and usually does... BLOWN

the 1-2% range is primarily to protect from extreme loss to capital which is very important when managing funds and in institutional trading etc. The issue is always balancing loss aversion vs profit seeking. Depending on your strategy, the Kelly Criterion might suggest a 15% risk to optimize the growth of your account. But with that 15% come inevitable large losses, even if the theoretical projected equity curve is maximally upwards. Kelly Criterion does not however take into account concurrent trades. Also consecutive large losses (big drawdowns) can destroy even the most resilient psychologically. It's a balancing act and it will vary according to the trader's personality, the specifics of his situation, the size of his account, etc.

I'll recommend to start with 1% risk and increase it gradually.

Yeah, 1% is advisable for a beginner.

Yes, I also try to trade without risking too much. There is a low risk thing that makes my account live, but the interest is also very very low.

How much do you usually risk when you open a new trade?

just recognize your edge..and you will know how to dealing with the risk...peoples say A B C bla bla bla..but in the real trading you cant control your finger..dont tell me you have a discipline like a robot..