I am interested in your opinions regarding this. A guy I work with that also trades FX trades for high pips but risks such a small amount I wonder why he bothered, myself I will risk a larger amount on lower pips.
I know neither is right or wrong but I am interested to see where the majority lay.
Hey,
Personally i wouldn`t bother with either, the spreads going to eat half your profits,
but to try and answer your question, generally, a low risk to large profit ratio is better,
So say for instance there was a trade where you were risking 50 pips to make 150.
that would be better then risking 150 to make 50.
It would take 3 losses to get back to where you started - spread.
the other way it would be 1 loss to wipe out your winnings from 3 trades.
I`m sure that short term traders such as scalpers will give you a different answer, but in general i trade longer term trades are open for several days.
Regards
N
The answer to that would and should be, 2 to 3% of your acccount at risk on any trade and 5 to 8% max total. So on each trade it might be different. If you are trading off a 15 min chart you might have a 30 pips stop and if your trading off a 4 hr chart you might have 100 or higher stop. So I adjust the amount per pip according to the % risk the stop would give me.
30 pip stop would be either 150 or 300, is that wihin the 2 to 3% of your account If so maybe you can even risk more.
Thats how I figure it any way. So I didnt vote in the pole because both could be wrong for me.
Neither. I don’t calculate risk in terms of $ per pip. I calculate it in terms of profit-to-loss, expressed as a ratio. For example, in the coming week, I will be trading at a 1.5:1 PLR. My stop loss will be set for 30 pips, and my take profit for 45. The exact $ per pip will vary depending on how much of each pair I buy.