Let say i have 1000$ account and I want to risk 3% per tade
1st trade - risk = 30$
when above trade is open, i find opportunity for 2nd trade
to determine the lot size for my 2 nd trade, do i need to take 3% of 1000$ or 3% of 970$
Thanks in advance for your time and help
there is no “correct” size … it depends on your system and what you like/dislike … i suggest you quit trading alltogether
No, do not give up! No question is unworthy of an answer!
I would think that it is 3% of 970$ that you have to use, for the simple reason that your Equity on
open positions (your ‘floating’ P/L) is part of the calculation…
Here is a quick recap for you:
Account Information – FXCM Support Portal
Good luck!
Regards
I think this is a pretty harsh reply give its not a totally mental question.
I think you are confusing what “A trade” means. In general if someone is risking 1% per trade then this will be per idea. So you might think GBP is currently going to continue its breakout up, this is an idea and with your account balance you should only risk $30 total on that idea. You could split that into 2 trades of $15 risk and load in, but you should be careful committing too much capital to a single idea as this breaks diversification guidelines. You can break them if you like but they are there to keep you alive.
Ok now to anwser your original question. If you are going to load into a position then you should have a plan or where and how you will manage this trade before you put the first positon on. This said you should be able to workout your up front capital requirement/risk if everything goes to plan and then split that total risk appropriately as you go along.
The reason for this is that if you are working on a big few loading trades at the same time and you do not pre-allocate capital then you might find you cannot for a given trade, load into it as you need becuause you have too much risk else where.
There is an annology here to the way that vitual operating systems share system resources on a pyhsical server but i will save the details as they are very, very boring.
im sorry , vija, if you felt insulted … wasnt my intention.
thats Ok johnny…i didnt take you wrong… good day:)
Its probably me being overly sensitive…
Great question!
I think this is a matter of preference, since the values will be very close to each other, but personally, I would take 3% of whatever my equity was at the time I opened my second position.
For example, my first trade might be floating a profit of $10, in which case, I would risk 3% of $1010 on my second trade which is $30.30. On the other hand, if my first trade was floating a lost of $10, then I would risk 3% of $990 which is $29.70.
for every $1000 i risk 2% that means i break down 20 bucks into the right lot size to be able to take all the setups i can. If you are seeing setups pop up with out you already prepared for the trade then don’t take that setup because it wasn’t in your original trade plan that you devised before the session began. Yes i keep using the same 2% for the inital float amount until i’m down $1000 bucks. Moral of the story is “plan the trade, then trade the plan”.
I like this point a lot