Hi Franziska. If my sl gets hit, I will loose 0.8-1% of my entire balance
As a rule, I open several trading accounts. One of them is used for very cautious trading where I don’t risks more than ten percent of my trading deposit – a common tip, you know. Another account is used for very aggressive and risky trading. That’s where I can put at stake the entire depo if I find it reasonable at this particular moment.
If you know your strategy’s expected return, you can use the Kelly Criterion for optimal position sizing.
I always set aside a certain percentage of my money for trading and I try to manage my money every month so that I don’t run into any problems.
I specify a certain percentage for the level of risk I am comfortable with in trading. I only risk %1 of my trading capital per trade. You know between %1 and %3 is recommended based on your risk tolerance, trading experience, and overall financial goals.
Your comment and guidance have been instrumental in my learning journey. Thank you for sharing your expertise and taking the time to provide advice.
I don’t take much risk in trading because my trading capital is smaller indeed.
The amount you risk depends on your risk tolerance , your trading strategy, and the condition of the market. Risk management is a critical aspect of trading, and it’s important to develop a risk management plan that suits your individual circumstances.
That’s a very subtle topic, cause it’s literally a double-edge sword. On the one hand - higher risks guarantee higher profitability, however, on the flip side - higher risk implies higher chance to lose everything at once.
That’s why there are many strategies in the world which are based on the risk/reward ratio. Some of them allow to trade with higher risk, while others, more conservative and reliable, are distinguished by lower risk, but at the same time, lower yield.
Always appeal to your personal risk tolerance as it’s a very big topic in trading psychology.
I think it all depends on your experience. And if it is small and trading is still going on with varying success, then it’s not worth investing a lot of money. First you need to create your own trading strategy and test how it works on a small account, improve it and optimize it. And only then, if there are positive results over a longer trading period, make a decision to increase the deposit.