I was wondering if it’s okay to risk 4% per trade as a swing trader see i take fee trades a month? I trade both eur/jpy and chf/jpy risking 2% for each though they are highly positively correlated. Thanks in advance
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No, its excessive as a beginner. The “half-life” of your account capital at 4% risk per trade is only 17 trades. Too few to learn much statistically from.
EUR and CHF are too closely correlated to trade simultaneously: trade one or t’other.
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Now the issue is am nolonger a beginner and these 2 weeks alone i have made 11% without breaking any rules but I was just asking coz am new in swing trading… and also how much should I risk maximum?
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In that case, don’t bother letting other people stop your success because they disagree with what you’re doing.
If it’s working for, just do it. Keep us updated, though!
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Thanks a lot …coz it’s been work really well and my losses have always been small 1% maximum and that happened when I opened 2 positions at once i just needed to ask a fellow swing trader to see if they have done the same and it’s working
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I haven’t achieved consistent profitability yet. But if you’re doing something and it works, keep doing it. Others may disagree, and for good reason.
The bottom line is that you’re in control; it’s your choice. Keep going!
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4% is a lot for someone who is new to swing trading. This tells me that your strategy has not yet been time tested by you.
Does this mean you are closing your trades manually? Are your exits (both SL and TP) predetermined before you enter your trades?
This is good but was it because of your strategy, or just a lucky run. Only time will tell and I don’t feel enough time has passed.
I do wish you continued success. Can you tell us a bit about your strategy?
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The common sense response is that you have control over your risk exposure, but nothing else that the market would throw at you. On the assumption that you should be protecting your account all the time, it’s your call.
The downside is whether you have a small account size, which needs to be closely monitored, and a 4% open risk doesn’t give you much leeway. However, the upside is that if you have a 3k account (same as me) where a 4% open risk exposure is money manageable if it loses. .
Best of luck.
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I do swing trading where I trade weekly charts taking a conservation approach watching levels and price action.
If 4% risk works for you, you have tested it and is consistent continue the strategy I risk 1% or less per trade and have started becoming profitable now after 3 years of trading trying many other strategies. As long as you stick to your rules, don’t deviate away, treat forex trading like a business and understand its not a get rich quick it takes time to reach consistent profitable, when journaling my trades last year was the only time I was in profit.
This question makes no sense if you don’t measure your reward % and your win rate
For example, if when you hit profit you Make 2% and your win rate is 60% (you hit profit every 6 out of 10 trades), you Will very soon blow your account.
However if your win rate is 50% and when your trade hits profit, you Make 12%… why not risk 4%??
Be honest with yourself and realistic. Only you can answer your question by knowing you win rate and reward%
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If you are sticking to your rules and made 11% in a couple of weeks as a Swing Trader is not bad at all. What is your accuracy?
That depends on a lot of things really. If you’ve never risked 4% on correlated pairs, I would say start with risking 1.5%/pair and keep an eye on your psychology during the trade.
I scalp the EUR/USD and the GBP/USD. They are somewhat correlated. I think it’s better if there’s a bit of difference. I try to move the SL into the green before I take the second trade.
I’ll answer for myself here…
No, it’s not okay. I never go above risking more than 1% per trade no matter how confident I might be with a trade idea, 1% risk per trade is my maximum.
I’m also a swing trader (or rather something between a position trader and a swing trader) and what I usually do is to add more positions on my winning trades OR increase my position number per trade idea if I see that it’s very lucrative, rather than increase my risk per trade.
If you are new to trading increasing your risk generally increases your ability to blow your account. It’s best to go Demo until you think that you know your instrument of choice then go slow at it. Trading should become a lifestyle not a race against Usain Bolt.
The long and short answer is No.
Everything I have learned ovrr the past 9 years says not to risk more than 2% per trade
Hope this helps
It is ultimately up to you to decide how much risk you are comfortable taking on each trade. However, it is important to consider the potential risks and rewards associated with each trade before making a decision. Generally speaking, the higher the risk, the higher the potential reward. However, it is also important to consider the potential losses associated with each trade.
After some years,yes you can ,no problem. But for now ,it doesnt really matter how much you risk,because you will anyway lose, you can even try 0.5% ,but it wont help you,you will still lose. Thats how your account balance will be now -0.5 -0.5 -0.5 -0.5 +1 -0.5 -0.5 and so on .