Which position size will be okay for me to at least make reasonable profits every month

Trading Discussion Risk Management Practices
1

I have been trading for three months and at the end of each month I notice that I am right 40% of the time. How do I size my trades to make reasonable profits each month

2

Your position size is based on how much you want to risk per trade. Figure out where you’re SL is going to go, how much you want to risk, then your position size is automatically calculated. If your success rate is 40% then you want a Risk:Reward ratio of at least 1:1.5. More is always better, but don’t get greedy. That’s assuming you let all your trades run to SL or TP.

Try using the BP Position Size Calculator

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3

That calc is great. It’s been a breeze plopping my numbers in there, and bam, spits out your units. Can’t get easier than that!

And when you have a demo account with built-in leverage, say 10X, you can just divide your units by leverage to get 1:1 leverage instead.

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4

You are right 40% of the time? But what does this mean?

For example, if it means you look at the charts and 40% of the time your analysis says price will go up and price does go up, then you must realise that you have also predicted with 60% accuracy that price would actually go down…

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5

So how do I take advantage of this?

6

I discussed this in this video,

7

I can’t say as I you don’t elaborate by what you mean by “right”.

To be simplistic, if your TA shows that after Pattern X, price goes up and you are right 40% of the time, then the same pattern also shows that price goes down 60% of the time.

But in trading, nothing is that simple. Need more information.

8

When I say right, I mean that my analysis is correct 40% of the time. Let’s say last year I took 15 trades, 6 were profitable then the remaining were losers. I have had the same 40% profitable trades for the past three months

9

Risk reward/reward to risk ratio. Pretty funny, because this article covers exactly your successful trade percentage. In a nutshell, you potential gains (if you hit your profit targets) need to be higher by some percentage/magnitude than your potential risk (stop loss) on each trade.

Took me a while to figure this out too. Thought you just need more winners than losers.

10

It’s not enough to know your win percentage.

You need to know your expectancy.

Is it positive? Negative?

For that, you need to find out your average gain and average loss.

For more info: