Money Management

[WEALTHYMAN]

Hey fellow Traders,

In the school of pipsology it states that most succesful traders dont risk more than 2 to 3% of their account on any one trade. Does this mean that the margin put up for the trade should not be more than that percentage or the risk of loss (stop loss) should be no more than 2 to 3% of the trade.

For example if an account has 10,000 in it should my maximium margin per trade be 300.00 or does this mean I never risk loosing more than 300.00 in any one trade?

[theblognovice]

Hi Wealthyman,

I believe the author meant 2-3% of your own money in the account regardless of the margin.

The Blog Novice

[decoir]

WEALTHYMAN - people can mean both ways, I think. The stop-loss one gives a more concrete sense of how much you’re actually risking, though.

[DRA]

Hey fellow Traders,

In the school of pipsology it states that most succesful traders dont risk more than 2 to 3% of their account on any one trade. Does this mean that the margin put up for the trade should not be more than that percentage or the risk of loss (stop loss) should be no more than 2 to 3% of the trade.

[B]For example if an account has 10,000 in it should my maximium margin per trade be 300.00 or does this mean I never risk loosing more than 300.00 in any one trade?[/B]

Never risk loosing more than 300.00 in any one trade.

[tymen1]

Never risk loosing more than 300.00 in any one trade.

Confirmed.

A stop loss = risk.