Quick Capital Question

Should time frame size affect money management? For example, 5 minute time frames= 2% risk as opposed to 4 hr time frames= .5%-1% risk?

Or, is this one of those temperament things in conjuction with experience and money management? I hope my question is clear. :slight_smile:

Thanks

I have been experimenting with this very thing.
The system of MM I have found that works very well for me on short time frames is this. I set a 2% daily loss limit. I make a lot of trades. I decide how many times do I allow my stop to be hit before I call it a day. I usually start with 3 or 4. You can see thatโ€™s a low risk trade to start. If I move into profit I can look at how much capital I can lose and still be within my 2% daily loss limit. I can increase lot size per trade ( I always use a stop) once I have a profit buffer I can trade a large lot size and aim for a few pips per trade. I find its relatively easy, safe and repeatable to make 2 pips with a 10 pip stop. even if my 10 pip stop gets hit it may only bring me down to break even for the day. I rarely let that stop get hit. If I push this to far I can break down and blow up the days work in a few trades. If I make 4% in one session and want to keep going I reset everything.

Longer term trades are not my strong point. I feel for me 2% is to much to risk in one trade. .5% gain per day will give me a respectable return if R/R is around 1 if I average 1 trade per day I would aim for a 1% gain per trade I would try to put my risk per trade at a level that would allow for an average .5% gain per day over time with my losers figured in. As you can see if I managed a win ratio over 50% my risk per trade would be less than 1%.

Thats hard to read but I think you can see what I am getting at. I trade the MM I mentioned for short time frames on a live account It works very well for me and is an important part of my plan. I work pretty hard and wait for good set ups to get to .5% but once I get to that point I can start closing trades at a few pips profit with an increased lot size this can add up fast. It also gives me a warm up period with lower risk trades when I start the day and gives me a feel for the markets mood.

personally i feel as tho it depends on your trading system too. on my scalp trades i like to trade 1$ pips for every 1k in my account and only risk 1-3%. on longer term trades there can be more retracement so in order to cope with this i may trade .50$ pips for everk 1k in my account to match the retracement. tho on one of my long term systems it usually only retraces 0-25 pips while potential profit ranges from 30-about 100 with a 45 pip average so my stop will generally be small allowing me to trade a higher value pip
hope this helped some :stuck_out_tongue: