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What should be the risk percentage?

downtown
Jan 29 at 07:35
26 postów
Either 2% or 1:2 risk ratio are fine

LyudmilLukanov
Jan 29 at 09:08
372 postów
Traders should not take more than 5% risk per trade. That’s why traders can survive in the market long.

gildlef
Feb 04 at 09:59
27 postów
It is wise to not risk more than 2% of your trade. This will be safe and you won’t end up losing a lot.

phillipgriffin
Feb 09 at 08:17
33 postów
downtown posted:
Either 2% or 1:2 risk ratio are fine

Is there any strategy or any method to set the risk reward ratio for a day trader like me?

phillipgriffin
Feb 09 at 11:22
33 postów
phillipgriffin posted:
downtown posted:
Either 2% or 1:2 risk ratio are fine

Is there any strategy or any method to set the risk reward ratio for a day trader like me?

Call it a strategy or not, there’s actually a simple formula that asks you to compare the amount you’re willing to risk on the trade to the prospective gain. Statistically speaking, if you’re planning to have a prospective profit of $600 as compared to a projected risk of $200, the risk reward ratio in this case would be 1:3. So, now if you place say 10 trades with a ratio of 1:3 and only made profit in 3, you would still make $400. A decent amount of profit despite being correct only 30% of the time.
The 1% rule can give you the leverage to withstand a long string of losses. However, before you plan on risking even 1% of your money, I’d suggest you to practice on the demo account. I did the same with my brokers Fxview and IB to have a better understanding of how the market works.

phillipgriffin
Feb 10 at 07:03
33 postów
phillipgriffin posted:
phillipgriffin posted:
downtown posted:
Either 2% or 1:2 risk ratio are fine

Is there any strategy or any method to set the risk reward ratio for a day trader like me?

Call it a strategy or not, there’s actually a simple formula that asks you to compare the amount you’re willing to risk on the trade to the prospective gain. Statistically speaking, if you’re planning to have a prospective profit of $600 as compared to a projected risk of $200, the risk reward ratio in this case would be 1:3. So, now if you place say 10 trades with a ratio of 1:3 and only made profit in 3, you would still make $400. A decent amount of profit despite being correct only 30% of the time.
The 1% rule can give you the leverage to withstand a long string of losses. However, before you plan on risking even 1% of your money, I’d suggest you to practice on the demo account. I did the same with my brokers Fxview and IB to have a better understanding of how the market works.

Ok, so I do understand that the 1% rule is for the beginners, rather it’s the most critical rule they need to set and follow. But what if I’ve spent years trading? Do I still need to follow this risk reward ratio?

salamibrish
Feb 10 at 09:52
28 postów
phillipgriffin posted:
phillipgriffin posted:
phillipgriffin posted:
downtown posted:
Either 2% or 1:2 risk ratio are fine

Is there any strategy or any method to set the risk reward ratio for a day trader like me?

Call it a strategy or not, there’s actually a simple formula that asks you to compare the amount you’re willing to risk on the trade to the prospective gain. Statistically speaking, if you’re planning to have a prospective profit of $600 as compared to a projected risk of $200, the risk reward ratio in this case would be 1:3. So, now if you place say 10 trades with a ratio of 1:3 and only made profit in 3, you would still make $400. A decent amount of profit despite being correct only 30% of the time.
The 1% rule can give you the leverage to withstand a long string of losses. However, before you plan on risking even 1% of your money, I’d suggest you to practice on the demo account. I did the same with my brokers Fxview and IB to have a better understanding of how the market works.

Ok, so I do understand that the 1% rule is for the beginners, rather it’s the most critical rule they need to set and follow. But what if I’ve spent years trading? Do I still need to follow this risk reward ratio?

Well no, that entirely depends on your comfort as a trader to bear the loss. See, the 1% rule can be twisted depending on your account size and the market. You simply need to set a percentage that you’re comfortable playing and risking around with. Once done, all you have to do is calculate your trade’s position size depending on the entry price and stop loss.

forextrader777
Feb 12 at 11:28
78 postów
Risk percentage depends upon your risk tolerance. Both are directly proportional to each other.

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