A pity this thread has died.
It contains many a valuable lesson and shows how new traders get mixed up with terminology and calculation methods easily.
I posted in this (4 years dead) thread in the hope of reviving it, as I am sure that also in 2011 there must be people confused about the issue.
Cheers,
O.
as much as possible i would wish to have 0% risk on my trading. but i know it sounds strange. Normally, i’d go for 1-2% only. More than that, I have to use my demo account for me to test any new strategy and avoid getting higher risk when using the live.
I like the question that you are asking because it shows the you are thinking about the balance of risks and rewards. I personally have found that in the beginning I was more focused on the reward/compounding side of things but learned the hard way to focus more to the down side. If you manage the risks and the profits will be there longer term. Remember it is a long term numbers game that your system generates so you want that to have the ability to work and not blow up an account. hope this helps.
I am not trading many in a single day and keep it to 5 trade maximum in a day. So risking 1% in a single trade is the idea for me and I feel this risk fine for me.
To be on a safer side, I risk just one percent of my trading capital why hoping that I can make good returns with it. It good one minimize risk because Forex is risky and to be successful here, we ought to indeed learn on managing our capital and making good money for ourselves from this business.
A 2007 thread, blowing the dust off this thing huh.
Every new trader should be risking a minimum per trade. 1% works, heck, even risk 0.5%. Your goal as a beginner should be preserving your capital while maximizing your learning via trading. Make sure you’re logging all of your trades.
Once you’ve developed as a trader and are consistently profitable, your risk % should be based on stats, not discretion (based on your trading performance, not what you’re comfortable with risking).
Once you’ve what you’ve got a solid grasp on forex trading and you can profit consistently, start a new trade log/journal. Log several hundred trades in this journal. Once you’ve done that, calculate your payoff ratio and accuracy % and play around with the risk % on a risk of ruin calculator to get a risk of ruin as low as possible. Risk of ruin should determine your risk %.
1% of available capital? this so small risk percetage , let says when have fund in amount of $100 then its mean just $1 in risking the capital at every transactions , then its also when risk reward ratio is 1:2 then the reward that will accepted is $2, then the question is satisfied with that reward?