What is your % of risk per trade?

[DitterPD]

Just curious to know what is the risk management of my fellow traders here.

Is 2% per trade is too much for a trader with a few months experience?
How many trades per week do you make?

Looking forward to your side of the risk

 

[traderbinary]

Just curious to know what is the risk management of my fellow traders here.

Is 2% per trade is too much for a trader with a few months experience?
How many trades per week do you make?

Looking forward to your side of the risk

That's a huge question dependent on a million factors. The 2% figure is thrown about like gospel but don't rely on that. My absolute best suggestion to you is don't risk a NICKEL until you have consistently made money on a demo for months. Once you have achieved that use real cash very slowly as it introduces the biggest threat for most traders, their EMOTIONS. Follow that advice and you'll look back in 6 to 9 months and be very glad you did

 

[NVP]

how long is a piece of string ?

2% is a decent benchmark to use ..even less if you are learning the ropes and beware multiple trades as that immediately puts more money in the market ...........and I dont give 2 hoots about "ok to trade multiples if they are uncorrelated Markets" .......sure Markets are uncorrelated - until they are suddenly correlated !

You should perhaps look at Trades Per average number of elapsed BARS ..........its more defining than the looseness of time ...........when I look at someones trading pattern they can claim to be trading very little .....but the bar count can reveal them to be in the market far to much !

so for example an average of say 30 bars per trade puts you trading once a month on daily TF or 4 times a week on the hourlys ...etc etc

N

 

[DitterPD]

That's a huge question dependent on a million factors. The 2% figure is thrown about like gospel but don't rely on that. My absolute best suggestion to you is don't risk a NICKEL until you have consistently made money on a demo for months. Once you have achieved that use real cash very slowly as it introduces the biggest threat for most traders, their EMOTIONS. Follow that advice and you'll look back in 6 to 9 months and be very glad you did

But nevertheless, you must have some set of rules, don't you think? Yes, it's obvious "train, read, demo bla-bla-bla", but having risk management strategy is what keeps you afloat..

 

[DitterPD]

how long is a piece of string ?

2% is a decent benchmark to use ..even less if you are learning the ropes and beware multiple trades as that immediately puts more money in the market ...........and I dont give 2 hoots about "ok to trade multiples if they are uncorrelated Markets" .......sure Markets are uncorrelated - until they are suddenly correlated !

You should perhaps look at Trades Per average number of elapsed BARS ..........its more defining than the looseness of time ...........when I look at someones trading pattern they can claim to be trading very little .....but the bar count can reveal them to be in the market far to much !

so for example an average of say 30 bars per trade puts you trading once a month on daily TF or 4 times a week on the hourlys ...etc etc

N

Can I ask for a clarification of something?
So I must not trade more than 2% of all my combined orders (i.e., trading session) or no more than 2% per trade (i.e, order)?

 

[ffsear]

so for example an average of say 30 bars per trade puts you trading once a month on daily TF or 4 times a week on the hourlys ...etc etc

N

Does that matter though? 1 trade is 1 trade in terms of % risked

 

[traderbinary]

But nevertheless, you must have some set of rules, don't you think? Yes, it's obvious "train, read, demo bla-bla-bla", but having risk management strategy is what keeps you afloat..

Hi

Yes I completely agree (in fact see my other posts), what I was trying to get across was to NOT go live with money until he had developed a full proven system which of course would include as priority cash management. People going live to early is a huge reason why traders "fail". They just haven't put in the time, try to do it, blow out their account, then think its impossible plus without a good reserve of cash they cant get back in anyway. Its a fallacy you cant make money the trick is putting in the time til you understand how it works (for you) THEN go live with SMALL amounts. Build from there.

I would say finally too that there is NO hard and fast rule or even guide to cash management and is purely system dependent. Its all down to risk / timescale/reinvestment AND hugely related to your experience and ability to deal with losses emotionally

Hope that explains my thoughts better

 

[traderbinary]

Can I ask for a clarification of something?
So I must not trade more than 2% of all my combined orders (i.e., trading session) or no more than 2% per trade (i.e, order)?

Do you mind if I ask - are you trading live (real money)? If so stop immediately. If you aren't sure where you should be on cash management issues you will without doubt blow out your account very quickly. Work your system (including cash management) thoroughly through a demo profitably before risking anything.

Cash management is enough to fill book volumes, instead of you are starting out a better rule of thumb is "what will my reaction be to losing this trade?" Only trade amount levels that do not set your heart racing as it will undo your trading ability. Stress free systems are winning systems

final note, when looking for advice always ask if the trader is profitable and in what type of trading so you can be confident of adopting the information. hope that helps

 

[traderbinary]

Does that matter though? 1 trade is 1 trade in terms of % risked

Its more dependent on trading expirations for example 5 minute vs daily binaries. You have much more time to offset/hedge and extract yourself from a daily position while within a 5 minute you are much more tied. So for example if you staked 200 on each I would say that the 5 minute exposes you to more risk

 

[traderbinary]

Hi

Yes I completely agree (in fact see my other posts), what I was trying to get across was to NOT go live with money until he had developed a full proven system which of course would include as priority cash management. People going live to early is a huge reason why traders "fail". They just haven't put in the time, try to do it, blow out their account, then think its impossible plus without a good reserve of cash they cant get back in anyway. Its a fallacy you cant make money the trick is putting in the time til you understand how it works (for you) THEN go live with SMALL amounts. Build from there.

I would say finally too that there is NO hard and fast rule or even guide to cash management and is purely system dependent. Its all down to risk / timescale/reinvestment AND hugely related to your experience and ability to deal with losses emotionally

Hope that explains my thoughts better

I need to add to that the comment of "train/read blah blah" makes it all seem rather a mundane methodical progression to trading success. As a tiny fraction of people actually make money Im not sure if that stands up to scrutiny lol

 

[DitterPD]

Do you mind if I ask - are you trading live (real money)? If so stop immediately. If you aren't sure where you should be on cash management issues you will without doubt blow out your account very quickly. Work your system (including cash management) thoroughly through a demo profitably before risking anything.

Cash management is enough to fill book volumes, instead of you are starting out a better rule of thumb is "what will my reaction be to losing this trade?" Only trade amount levels that do not set your heart racing as it will undo your trading ability. Stress free systems are winning systems

final note, when looking for advice always ask if the trader is profitable and in what type of trading so you can be confident of adopting the information. hope that helps

Yes, I'm trading live and I'm not a pro, but I probably didn't understand what NVP meant, because I'm trying not trade more than 2% per trade. But I think no harm done if I put multiple trades with stop losses at 2%.. As you say, it's not putting me at stress every time market bounces one way or another, so it must be good approach..

 

[traderbinary]

Yes, I'm trading live and I'm not a pro, but I probably didn't understand what NVP meant, because I'm trying not trade more than 2% per trade. But I think no harm done if I put multiple trades with stop losses at 2%.. As you say, it's not putting me at stress every time market bounces one way or another, so it must be good approach..

Sounds good! Heart pounding never a good idea

Remember that stops aren't always guaranteed

 

[DitterPD]

I need to add to that the comment of "train/read blah blah" makes it all seem rather a mundane methodical progression to trading success. As a tiny fraction of people actually make money Im not sure if that stands up to scrutiny lol

Everyone knows that they should quit smoking, eat healthy & exercise, but how many follow this advice? Same here: you work hard, train yourself, make healthy habits and then hope that you don't have any hidden genetics traits, which will derail you from the road to success..

P.S. On the side note, I do not believe that you can put all your problems and hardships on genes.. yes, it can make it harder to achieve something, but in general it's all about lack of willpower and keeping up with "healthy" (wherever and whatever it can be) habit.

 

[traderbinary]

Everyone knows that they should quit smoking, eat healthy & exercise, but how many follow this advice? Same here: you work hard, train yourself, make healthy habits and then hope that you don't have any hidden genetics traits, which will derail you from the road to success..

P.S. On the side note, I do not believe that you can put all your problems and hardships on genes.. yes, it can make it harder to achieve something, but in general it's all about lack of willpower and keeping up with "healthy" (wherever and whatever it can be) habit.

lol, yes all very true! Experience (successful!!) helps a lot as the biggest problem results from following all principles and trading well then having an unexpected terrible loss that throws you off the rails!!! Especially with short term binaries.

Very Painful!!

 

[DitterPD]

lol, yes all very true! Experience (successful!!) helps a lot as the biggest problem results from following all principles and trading well then having an unexpected terrible loss that throws you off the rails!!! Especially with short term binaries.

Very Painful!!

The biggest problem, that deep inside we are still hunters, don't like to lose and have trouble understanding, somewhat, chaotic movements.. And when we think that we have thought about everything, but we see that market went in other direction, we want to put more effort (money), just more stubbornness (trades) and we believe that eventually will catch that prey (pips).. it's hard for brain to adapt to bigger picture, which is Forex and get used to idea that sometimes letting go "prey" now, is in reality to have more stability and "provision for the tribe" later..

 

[traderbinary]

The biggest problem, that deep inside we are still hunters, don't like to lose and have trouble understanding, somewhat, chaotic movements.. And when we think that we have thought about everything, but we see that market went in other direction, we want to put more effort (money), just more stubbornness (trades) and we believe that eventually will catch that prey (pips).. it's hard for brain to adapt to bigger picture, which is Forex and get used to idea that sometimes letting go "prey" now, is in reality to have more stability and "provision for the tribe" later..

Well said!

 

[DitterPD]

Well said!

Thanks.. Well folks, that ends our discussion about risk and Forex.. Build you willpower, train your character and godspeed you! :cheesy:

 

[Red Indian]

I have been trading hourly charts in Indian markets for more than 5 years now. The way I manage my risk is as below:

Risk per trade : 2%
Maximum positions at any one time : 8
Break-up of positions:
1. Stock index (S & P Nifty)
2. Bank stocks index (BankNifty)
3. Soyabean
4. Mustard seed
5. Gram
6. Copper
7. Crude
8. Silver

The system I use generates about one signal per week per item. I trade both long and short sides (depending on the trend). Sometimes, I may take only 1% risk. Overall, on most occasions, the total portfolio risk does not exceed 10% of the capital as I may not always get a signal from all the items that I trade.

The risk has to be smaller if the time frame being traded is intraday. I think the advice of 2% per trade (and having only 2-3 open positions at any time) applies only to intraday trading. So far as swing traders and positional traders are concerned, they need to have 10% of capital at risk in their portfolio otherwise most of the capital will remain unutilized.

BTW, with the above mentioned risk management, I have been generating 40-50% per annum with a maximum draw down of 10%.

 

[DitterPD]

I have been trading hourly charts in Indian markets for more than 5 years now. The way I manage my risk is as below:

Risk per trade : 2%
Maximum positions at any one time : 8
Break-up of positions:
1. Stock index (S & P Nifty)
2. Bank stocks index (BankNifty)
3. Soyabean
4. Mustard seed
5. Gram
6. Copper
7. Crude
8. Silver

The system I use generates about one signal per week per item. I trade both long and short sides (depending on the trend). Sometimes, I may take only 1% risk. Overall, on most occasions, the total portfolio risk does not exceed 10% of the capital as I may not always get a signal from all the items that I trade.

The risk has to be smaller if the time frame being traded is intraday. I think the advice of 2% per trade (and having only 2-3 open positions at any time) applies only to intraday trading. So far as swing traders and positional traders are concerned, they need to have 10% of capital at risk in their portfolio otherwise most of the capital will remain unutilized.

BTW, with the above mentioned risk management, I have been generating 40-50% per annum with a maximum draw down of 10%.

Wow, thanks for the insightful post

 

[copa8]

Just curious to know what is the risk management of my fellow traders here.

Is 2% per trade is too much for a trader with a few months experience?
How many trades per week do you make?

Looking forward to your side of the risk

risk 0.5% per day trade
avg about 5 trades/day, so 25 trades/week