I have been trying to successfully day trade a $10k account. I usually take only 1 trade per day. I initially started putting 1% risk on every trade for 30-40 pips and thought that i will be safe. I look at 4h and 1h charts. My account is now decimated down to $9430 in one month. I want to know best trading style and lotsize for this size of account.
I have been taking positions with 0.2 standard lotsize. I initially thought that i will be safer with this lotsize but it now looks very scary and volatile to me.
I also want to know even if daytrading suits $10k account. My monthly goal is to earn anywhere between 5% to 10% but it currently looks totally impossible to me.
Please help…
You dont want to put in risk more than 3% of your account, so take in consideration the amount of pips of your stop loss.
Fore example, with an account of 10K and 30 pips stop loss a good lot size would be 1 standard.
In that case, you would be only risking 300 dollars.
Another topic that would be good to bring is the risk reward ratio. The minimum I would go for is 1:2.
$30 is 0.30% of $10,000 account. $300 is 3% and that is huge risk on a single trade for my taste.
Regarding the earlier post, 3% is way too big.
- Risk about 0.25% to 0.5%.
- If you lose 10 trades in a row, stop everything you are doing and analyze those last 10 trades and your methodology as a whole (you would only be down 2.5 - 5% at this point, not a big deal)
- After a large sample of trades (100 or so?) if you are up overall without any crazy draw downs, consider upping your risk another 0.25%
- Rinse and repeat until you hit a max risk % of around 1%
This exercise should take a really long time, months or years, but at least you will be increasing your risk at the right time and not increasing it at the right time.
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Rule number 1 never trade money that you are not willing to lose, if you are afraid to lose 300.00USD then you may want to change the size of your account from 10K to 1K, a 3% in that case would be only 30 dollars.
If I was trading and risking 30 dollars I would try to go for a minimum of 100 dollars profit, but not to many people can stay in the trade for that long.
So a minimum would be 30SL for 60TP
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Monthly expectations for gains should be conservative, like a benchmark. 5% a month is high yield on the average month but some months offer big opportunities that can amount to 20%+. 0.2 as a lot size for a $10K account is pretty big, it’s an advantage to divide positions so you can cycle profits through the equity before your ultimate take-profit limits are reached. A reasonable lot size for a $10K account is 0.05 ($5,000), 0.2 is 2X leverage off the bat.
Net exposure is good up to around 10X (averaging 2X-6X leverage) except in big-event short-term trades. On a $10,000 account that would be a maximum aggregate position size of 1.0 lots divided any way. Average holding time for a position / trade would be around 2 weeks.
Day-trading is done best by full time and experienced professionals.
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