Yes, you clearly don’t understand the point of the advise “Only risk 1% - 2% of your capital on any single trade”. Your assertion that “from a mathematical perspective it’s simply not an optimal thing to do”, is pretty hilarious to a trader. Let me try to clear it up for you.
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Your job as a trader is NOT to maximize profit, it is to MINIMIZE loss. You WILL lose. If you trade, you will have losers.
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One (of many) rules of basic risk management is to only risk %1 of your capital on any single trade. In fact, a more experienced trader with a large account will only risk 1/2%!!! Not more!!!
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Truth: Someone with a small account will sometimes risk up to 2% (max if they are smart) in an effort to accelerate the growth of their capital. Sadly, this will often just accelerate them blowing up their account.
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Yes, in any given trade the more you risk, the more you will win IF it is a winner, but the more you will lose if it is a loser!!!
Let’s look at some math. If you start with $1,000.00, 1% is $10.00. My recommendation to you, a new inexperience trader would be paper trade for a full year, risk NOTHING. Then, once you have developed a trading plan that is profitable (one that will include rules such as risk no more than 1% on a trade), THEN and only then Live Trade. And risk ONLY $10 (even if you have a $100K account) using your back tested strategy and trading plan for 3-6 months!!! Now, at the end of that time if you are profitable, THEN start risking 1%!!!
Now from your post, I know there is no way you are going to take this advice and treat trading like a business, but back to 1% ($10) of your $1,000.00.
If you divide $1,000.00 by $10.00, you get 1000 / 10 = 100. In other words, you have up to 100 trades, even if you lose. Now lets say you decide instead to risk $500 on your first trade because you just KNOW it is going to be a winner. You lose. Now you have a 50% draw down, and have 1 $500 trade left in your pocket!!!
This is why. If you don’t understand this basic math, then I suggest you keep your day job, because you will be broke in no time, if you aren’t already.
Remember too, it’s not how much you win on any one trade, it’s how many winners vs. losers, and how much are you winning on trades vs. losing!