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Thread: 5% risk per trade?

  1. #31
    For me, 5% risk reward ratio is not possible because I get only 68% profit ratio from my private trading system! Within my live trading account, I use 1 percent mended risk reward ratio! Because of this, I don't concern about my SL transactions position. Incidentally, sometimes I use 2% once I am very sure about the entry quality.

  2. #32
    I fail to accept as true. Each faction of the market is uncertain and volatile,
    thus making mended pips risk ration when trading is merely impossible.

  3. #33
    5% risk and under of it is more appropriate to be certain a protected trading order but when market moves randomly it may be greater and you don't have any method to reduce and minimize the risk percentage.

  4. #34
    Quote Originally Posted by ;
    5 percent risk and below of it's more appropriate to make sure a secure trading order but if market moves randomly it can be greater and you don't have any way to reduce and minimize the risk percent.
    Really?
    Partial close? partial hedge?
    Trading isnt have to be all black and white, TP or SL, you have all the freedom to operate between those 2 lines in the sand however you desire, dont have to be a sitting duck.

  5. #35
    Quote Originally Posted by ;
    For me, 5 percent risk reward ratio is not possible since I get only 68% profit ratio from my personal trading system! Within my live trading account I use mended risk reward ratio! Because of this, I really don't bother about my SL trades position. By the way, occasionally I use 2% once I am very sure about the submission quality.
    Can you make 68% each month from your own trading system, while only risking 1% of your portfolio?

  6. #36
    The appropriate way to figure your lot sizing is that:

    Measure 1:
    -Test your egy and figure out what the biggest drawdown was to your egy.

    Measure 2:
    -Decide how much of your account you are willing to risk.
    -I advise not to go higher than 25%.
    -I advise not to make that amount too high when you have problems with plogy.
    -it's true that you will increase your account quicker the higher the number is but the higher that number the more difficult it will be to return from a drawdown in addition to the more difficult it becomes plogy shrewd.
    -a few people use 5 percent others 10 percent and some even 25%.
    -This amount is called max allowable drawdown.

    Measure 3:
    -Calculate your lot dimensions so your drawdown will stay inside your maximum allowable drawdown.
    -You can increase your lot size as your account grows or reduce your maximum allowable drawdown to risk less. You will likely wish to increase your lot size over time till you make enough and then start lowering your risk as your account is growing.


    Hints and hints:
    -Have a good sample size when testing your egy so that you receive the biggest drawdown your egy has had before.
    -If you have multiple egies and pairs you can set it all together and receive your main drawdown like that. If you do that you may be able to trade at a bigger lot dimensions should you have hedging egies. For example a egy that does well in consolidation and one that does well in trending markets may cancel out a few of the losers making your highest drawdown lower. If you do not have hedging egies you may have to lower your lot sizing because of the bigger drawdown and it may not be worth trading that second egy in the first loion.
    -If you do move over you maximum allowable drawdown it is time to review your trading because you may do something wrong or you analyzed your egy wrong.
    -You can also apply money management egies in addition to this which could make you grow slower or faster depending on your money management egy so that is something you have to test.


    I am sure there is more things I can say about this but this post is getting long and I doubt folks will love this article as most individuals are so put on trading 1% or something so that I will leave it at this.
    In the event that you heard anything or appreciated that I want to know.


    Thank you for reading.
    -

  7. #37
    I am a high-risk trader, so obviously I am sharing my train of thought. I would be regarded as the highest risk trader because I admire the law of the sl however I always reverse order when sl is struck. The moments in which I do this is not, arbitrary like I have a perceived calculation of x ray winning greater than y amount of % each trade. As long as you keep everything 1:1 then you should always have a net day in spite of adverse pips.Who wouldn't want to enter a trade in which their likelihood of winning is improved by greater than 85 percent on only reversing your order?

  8. #38
    I'm guessing everybody here is interested in math; this is worth a peek

    All reality, for example growth 7% of whatever 10 times and it'll double

    Therefore risk, 3.5% 2 1 benefit to risk, 10 winning trades and you just doubled your account


  9. #39
    This is an issue with figuring out how to exchange. . .too much theory. The principal way you will know the amount that can hold up under losing is to begin losing. Likewise, you need to manage the continuous reality of losing, isolate from the cash, beating in the forefront of your ideas. I have undergone a few long losing streaks, nonetheless suspended in on the grounds which I turned out badly my hardship limits. It looks like anything in life, theory is extraordinary, and essential, yet the theory ought to be tried. The results at that point edue the theory and the theory will change.

  10. #40
    Quote Originally Posted by ;
    I'm guessing everyone here is interested in mathematics; this is worth a look All truth, like increase 7% of anything 10 times and it will double risk, 3.5 percent 2 to 1 benefit to risk, 10 winning trades and you just doubled your account
    Many thanks for sharing that really thought provoking video. I watched the very first 35 minutes or so. Small wonder that Einstein was quoted as saying that compounding was the 8th wonder of the world (e.g. https://seekingalpha.com/article/380...king-advantage). With just a little but solid border, vast returns are mathematically possible (more here).

    On the face of it, winning 10 transactions at 2:1 RR sounds easy enough. This is exactly the same kind of notion put forward in threads like this one. However, everything else being equal (for instance, if we use random entries and exits) the probability of obtaining a win at 2:1 RR is 1/3 or 33.3 percent (because the SL is approximately two times as likely to be hit until the TP). Suppose we lower this probability to 30%, to allow for costs (spread, slippage,...). Then the probability of obtaining 10 consecutive winners is just 1/(0.3^10) or one chance in 169,350. Possibly not quite as easy as it may seem.

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