Can someone tell me what percentage of my Equity should constitute my Margin. I need a conventional method of money management in trading.
Depends on how many trades you make, and lot sizes too. Personally, I’ll never commit more than half of my equity to margin.
Say I have $10,000. That means no more than $5000 is on margin. Typically, it’d be even lower than that. Usually around $3000-$3500. The only time I’ll go up to $5k is due to say a news release or something of the sort, where I can make a quick 15min-2hr trade. I like leaving a lot of equity aside for my positions. Having an abundance of equity to cover unrealized losses is always a good idea. Trading too much at once is what will really burn you.
To be successful long term, and ride out the early stages of the learning curve, I recommend never leveraging yourself out over 5:1. The lower the better.