I use 2% risk when I trade on daily chart.
Now if I move to lower timeframe 1HR …do I need to lower risk % ? ( say 1%) ?
Does it make sense ?
I think 2% sounds reasonable
Hi Godzilla,
You’re trading the same market no matter what timeframe you’re looking at. You’re effectively zooming in on the same pair. What you need to look at is the likely entry and exit points, see how many pips you’re stoploss needs to be, and divide 2% of you’re account by that to give you risk per pip.
Going to 1% percent to be safe couldn’t hurt though.
What you should have is a day stoploss…that means a max percentage of equity you’re willing to lose in a day. this is because trading on lower time frames you might get more opportunities and even though 2% might sound sensible (actually i began to think recently that’s quite high) the losses can add up really fast and you’ll die the death of a thousand cuts. for example, 5 losses in a day X 2% equals -10%…are you ok with such daily swings in equity ?
MrBurger hits the nail on the head. You gotta get some data on your trading system first, mainly how many trades do you take on average per day, and what is the max you are willing to lose per day. I would also break that up to different market environments as you would likely not take as many trades on low volatility days vs. high volatility days. Of course, when you’re just starting out, you have no data, which is why it’s a good idea to run a system through demo trading, not only to master trading mechanics, but to optimize your trading processes and getting the correct data to create a sound risk management strategy.
In addition to above, the smaller the time frame the more important the technical analysis, the more trading opportunities and the possibility of more trading mistakes. Try this open your trading platform go to the daily and draw a vertical line through the last candle. Next change the time frame to the 4 hour, 1 hour, 30 minutes, 15 minute and 5 minute. You can see at each time frame what price has been doing since the current daily candle.
You may want to read up instead of asking so much questions that are already provided online.
How many maximum exposure you would want to keep open at the same time…Is there any rules to follow ?
I know. … I have already covered those my friend… however I need real traders experience . I ask to share experience from veteran members.
if my queries bothers you …please ignore my threads … save your valuable time …go trading …earn some more pips :)… you are free not to respond.
I recently adopted the 1% maximum daily exposure after i read this. it sounds logical and he seems credible as he’s not selling stuff. i also sleep much better at night. :57:
The final part of that piece, highlighted below, is not only logical but essential if you’re seeking long term success & longevity.
Pyramiding into winners is the one true holy grail.
the clever players pyramid in
whilst the rest are busy scaling out
The risk % you have opted for stays the same irrespective of which timeframe you choose…
Pigs Bum! There’s a holy grail for everyone and each is as unique as the speculator that trades it. Pyramiding might mean success for you but would easily destroy another’s account.
Godzilla, again only you know what works and what doesn’t for you. There’s plenty of research out there on money management and risk. Keep it simple bro, if you can’t sleep at night you have too much risk applied.
Of those long standing clients who trade regularly with a sensibly funded account (in other words serious and/or professional bettors as opposed to hobbyists), the most successful by a country mile share very common traits.
It’s the same story whichever firm you observe the statistical data from.
They diversify their bets across different asset classes.
They employ very simple, basic models.
They habitually [B]add to & pyramid winning bets[/B] at every opportunity.
They cut losing bets quickly & efficiently.
Oh, & one more;
They habitually [B]add to & pyramid winning bets[/B] at every opportunity.
You make to many presumptions my friend. As Speculators we a free of the rules and regulations and can do what-ever we want. Regardless of the size of the account if it’s growing you’re doing something right. So again I say
How old are you? lol
He’s not presuming anything, he’s a dealer you muppet. They churn these stats out constantly. It’s how they separate the wheat from the chaff & focus on those who actually generate revenue for the firm.
You’ll appreciate what he’s saying if you’re ever fortunate enough to migrate up to a proper account & join the real speculative world.
Newbies…don’t you just luv em! 
Ha, everyone struts around like a peac*ck when they’re punting a demo or chump change account.
And as thalia implied, when it’s nothing more than a hobby there’s no real pressure.
Quite a different kettle of fish however when the stakes start to ramp up.
You Minion
I don’t care if he’s the queen of sheba. He has a voice and can talk for himself. He doesn’t need you. If he is a dealer then scum always rises to the top, and you scrap it off. You should know its their marketing that causes most new entrants into this field to lose and they’re quite happy to take our money from us. As for you, member since Dec 2011, 29 posts, yep active forum members with a genuine desire to help fellow traders by sharing your own experiences, NOT!
Sorry Godzilla for hi-jacking your thread but these people need to join traderbary on the scarp heap. They have nothing to offer you. Pyramiding might just be a solution for you but then again it might not. What ever works for you is the best solution
what works is a relative term. under certain market conditions, martingale works. would you recommend that ? :17: