Some question about 1% risk management

Hi, I’m curious does 1% risk management means that with each new trade I would need to recalculate to 1% risk or it’s fixed for example if you had $1000 it would mean you can risk $10 for 100 times?

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The percentage of risk on a trade is not carved in stone and in fact is not even the main criterion here. It is only an approximation of what is a suitable maximum potential loss size in order to protect your capital in the event of a string of losses. For example, if you have a small account and you risk 20% of capital on a single trade then 3 consecutive losses will lose over half your equity and leave your account with a balance too small to be able to trade with effectively.

Using a 1-2% risk parameter is a good starting point in setting your stoploss level but you should always then fine tune it with respect to the earlier price movements. e.g. move it beyond a recent high/low or S/R level or MA etc. Your risk will then be <> 1% and rarely precisely 1%. If the nearest stoploss level based on price history is too far away to maintain a sensible risk level then ignore the trade.

These percentages are only guidelines, price movements provide the actual key levels to take notice of.

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Novice traders should remember that trading is a work for professional. If you want to stay here for long, you have to develop a mind set of a professional trader. You can’t treat it as gambling. You have to give time in learning.

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There is no limit to how much you can risk per trade. It is up to you to decide as per your affordability.

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1% risk management is for noobs who won’t want to risk money. But that’s for a few trades. Eventually, you’ll have to go ahead with the risk percentage to make profits.

Increasing the 1% risk is not the only way to increase profits.

For example, a winning trade can be pyramided and the stops of prior trades advanced so that risk never increases but the potential return is multiplied with each pyramid. Its a tricky tactic but powerful: probably best to demo it before putting in real money.

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You can do it both ways. But, probably the second one makes more sense.

Maybe you find this approach described in the lines below useful.

Risking 1% on each, calculated at the started point:
You start with $1000 and your maximum target loss of the year is 20% ($200). Then you may risk $10 on each trade till you lose $200.

We must understand that when we are trading with lower amount of risks we will remain as safe traders.

So you’re saying you’ll be sticking with 1% risk management strategy for 100 trades? Seriously? Why would you want to do that? I believe if you wanna achieve success, you need to alter the RRR after intervals.