% of balance to open positions

I'm curious what % of your account balance most of the pros here use to open positions ?

And what percent of your accounts do you risk ? Do you set stops to total 2% of your account 5% ...?

Just wondering if there is some consensus out there amongst experienced successful traders.

Thanks for the input

Yeah, interesting question indeed.

Hi Ray,

I think this has no fixed rule. This is depend on personal risk tolerance and the trader's trading strategy. Same trading strategy for different trader will have different risk management. This is one of the reason how come a same strategy will give opposite trading outcome when it is used by different traders.


Lets see what others say.

Regards,
SIM

pip2cash posted:
Hi Ray,

I think this has no fixed rule. This is depend on personal risk tolerance and the trader's trading strategy. Same trading strategy for different trader will have different risk management. This is one of the reason how come a same strategy will give opposite trading outcome when it is used by different traders.


Lets see what others say.

Regards,
SIM

Yes I agree and thanks for the reply. Each trader maybe has a limit no matter the personality or trading strategy. Maybe something like this..... I will never use more then ?% of my balance to open a position or positions. And I will never risk more then ?% on any trade or group of trades at 1 time.
Does that make sense ? What I'm trying to find is I guess is, what is YOUR answer to that personally.

Thanks again

Hi Ray,

This quote sound more sense to us 'what is YOUR answer to that personally'. I think the question is very clear now.
Would like to see more reply from different traders and if possible please state your trading strategy as well. Thanks all in advance.

Regards,
SIM

rjm354 posted:

pip2cash posted:
Hi Ray,

I think this has no fixed rule. This is depend on personal risk tolerance and the trader's trading strategy. Same trading strategy for different trader will have different risk management. This is one of the reason how come a same strategy will give opposite trading outcome when it is used by different traders.


Lets see what others say.

Regards,
SIM

Yes I agree and thanks for the reply. Each trader maybe has a limit no matter the personality or trading strategy. Maybe something like this..... I will never use more then ?% of my balance to open a position or positions. And I will never risk more then ?% on any trade or group of trades at 1 time.
Does that make sense ? What I'm trying to find is I guess is, what is YOUR answer to that personally.

Thanks again

rjm354 posted:
I'm curious what % of your account balance most of the pros here use to open positions ?

And what percent of your accounts do you risk ? Do you set stops to total 2% of your account 5% ...?

Just wondering if there is some consensus out there amongst experienced successful traders.

Thanks for the input

ray, its the key to find out how much you are conformable of losing, a day, a week, a month or a year. when you find out that answer, you would get the answer to you post question. thanks.

js

I regularly take 5+% risk but spread over few pairs but always along the trend as I perceive them. Try to move stop to BE as soon as possible at at least 1;1 r:. though. still interesting how others take risk and how much.

Emo2010 posted:

rjm354 posted:
I'm curious what % of your account balance most of the pros here use to open positions ?

And what percent of your accounts do you risk ? Do you set stops to total 2% of your account 5% ...?

Just wondering if there is some consensus out there amongst experienced successful traders.

Thanks for the input

ray, its the key to find out how much you are conformable of losing, a day, a week, a month or a year. when you find out that answer, you would get the answer to you post question. thanks.

js

Yes and thanks js.... But my question is what is YOURS what are YOU comfortable with ?
I understand its all about what each trader is comfortable with themselves.
I want to know what each of you out there are comfortable with.

Chikot posted:
I regularly take 5+% risk but spread over few pairs but always along the trend as I perceive them. Try to move stop to BE as soon as possible at at least 1;1 r:. though. still interesting how others take risk and how much.

Thanks for the response. That was right to the point.

I am not asking for advice on what I should do or that I need to find my own comfort level.

I just want to know what you pro's do.

So I will ask it again in yet another way.

What percent of your account do you use to open positions? for example, is it between 10% and 50% but never more then 60% ?

What is your risk level ? When it comes to placing stops ? Is it between 2% and 10% Never over 10% ?

Or is it a secret? HAHA jk

I think the risk level is a matter of your goals and your risk tolerance.

I use 5% for now - The maximum I can loose in any one trade if my initial stoploss points are hit is 5%. But my account is still small and I can take this kind of risk.

With a 100-200k account, I would reduce the risk to maybe 2%. This will still give me a good return.

Generally I risk 2% of equity. But...I also watch my win/lose ratio and average win/average loss per symbol. Where I achieve a very low Risk of Ruin I increase risk to 5% on equity, but on high risk of ruin I reduce risk to 1% or less of equity. Works for me.

thanks cris224 and Gary

helpful info

Risk 1% Spread out over 3-4 Pairs. Anything more and its A Casino - Cash out as a basket...

Risking for example 5% (is stopped out and lost) means you need to trade like 7% to break even. so start with the bare minimum amounts... you end up with an inverted curve, people who trade more then 2% run the risk of a blow out eventually.

Fxringleader posted:
Risk 1% Spread out over 3-4 Pairs. Anything more and its A Casino - Cash out as a basket...

Risking for example 5% (is stopped out and lost) means you need to trade like 7% to break even. so start with the bare minimum amounts... you end up with an inverted curve, people who trade more then 2% run the risk of a blow out eventually.

Knowing your win to loss is very important in deciding what ROA. I started on here with a 5% ROA not ROI, provided the win to loss ratio was well over 50% and risk to reward was 1:1 you would need more than 20 consecutive losing trades to blow your account, this probability favours you to being successful. However, with those figures you become an ATM lol.
Anywhere between 2 and 5 is suffuicient for a healthy lifestyle as long as you don't play catch up like risking more on the next trade and more on the next etc when you get a losing one or two etc.
Right/wrong?

it's all in the maths

It all depends on the system one uses. I know of a very successful trader that has a 30/70 win to loss ratio. I am taking about number of wins vs. number of losses here.

The stoploss should be the last resort of getting out. I have few criteria of cutting my losses built in my system, and it gets me out before the stoploss is hit. So the 5% risk is actually conservative.... the average loss is around 2%.

Trading is a losers game....Those who learn how to loose small, win in the long run.

Im not talking about placing stops. I'm talking about what percent of your account you use to open positions. Everyone seems to keep answering with 'risk' . Risk means how much of your account you use to place your stops.

For example. If I have $10,000 in my trading account and risk 5% for my stops. Thats $500 bucks I use for my stops.. Right ?
 So my stops are set at $500 . I can spread that $500 over 2 trades or 3 trades. or whatever.

So I have $9500 left in my account now to open positions .

How would you handle this ?

I understand everything about pip value . $1 per pip $5 per pip $10 per pip $100 per pip etc.

Im really just wondering how much of that $9500 do each of you use to open positions.

If your a scalper do you use most of that $9500 ?
If you trade the daily chart your stops are larger maybe 60 pips or even 100 pips. Do you use $5000 of that $9500 to open positions?

would you open 4 $2000 positions total $8000 and spread the $500 for stops over all 4 trades. $125 stops for each trade.

Ray, I think you are confusing risk per trade with margin utilization. I use 1% risk per trade and I use up to 50% of my account on margin. Let say each trade requires 5% of my balance for margin, then I can only have 10 open trade at the same time according to my rules. Each one of them has 1% risk, so my total risk is only 10%.

mikeyap9 posted:
Ray, I think you are confusing risk per trade with margin utilization. I use 1% risk per trade and I use up to 50% of my account on margin. Let say each trade requires 5% of my balance for margin, then I can only have 10 open trade at the same time according to my rules. Each one of them has 1% risk, so my total risk is only 10%.

Very impressive Mikey lol you must be very very experienced. With that kind of experience if applied correctly you could make a real good living.