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How much of your account do you risk per trade, on average?
I listed percentages because it is more useful than dollar amounts for comparison between members. However, I doubt many people know their % risk per trade (unfortunately). For those traders, dollar amounts would be better.
So we may repeat this poll in the future for that reason.
How much of your account do you risk per trade, on average?
Did you know your percentage risk per trade off the top of your head? Or did you have to calculate it? If you did calculate it, what method did you use?
I risk on each trade 1% of the account. I have often multiple trades running at the same time. If there is some correlations between trades I make sure that in correlated .market I risk in total 5% max.
I consider CL, GC, and ES as strongly correlated. Curencies are also correlated since they all refer to the dollar.
Cattle and hogs, offer me extra level of uncorrelation.
I compute the risk in my head , and I use the risk reward tool of sieeraChart. First I draw the risk reward drawing then I click on the qty of contracts to adjust the size until I see the risk getting closer to 1%, then I place the trade.
I used to think trade risk in terms of account percentage. Over time, I have realized my monkey is calmer risking a certain dollar amount to open a position and I have made peace with that approach. I am either All In All Out or I add to winners. Either way, I make sure my risk doesn't increase beyond what I risk for the initial position.
I also feel, with futures, you don't have to necessarily keep the cash in the account to maintain a percentage risk. This is of course assuming you have an edge with a positive expectancy. I maintain enough to be able to lever up and carry positions overnight when needed and maintain all margin requirements with enough cushion. If I have to express my per-trade risk as a percentage of all money that I could allocate for trading, it is well under 1%.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,059 since Dec 2013
Thanks Given: 4,410
Thanks Received: 10,226
None of the above. Run a portfolio of positions not individual separate trades. How is this different? Imagine I buy the Feb-Apr spread, then buy the Jun-Aug spread, then sell the Dec-Jun spread. My position is -Dec +Feb -Apr +Aug, ie a portfolio not individual trades.
I mainly trade options, I keep fixed points in premium as my SL and trail it. Generally in terms of % value of the account it runs to 5-10%. But it is not "fixed" for every trade. I just make sure it doesn't go above my appetite for a particular possible loss on a trade. Only rule I follow is that if that limit is reached I won't carry that position and I will walk away from terminal.
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"Be an observer, You are not your trading performance, Stop thinking so much, Eliminate/reduce social media activity, Accept the randomness" - Josh
It is, no doubt.
But then again, if you are scared of those fair punches, why box?
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"Be an observer, You are not your trading performance, Stop thinking so much, Eliminate/reduce social media activity, Accept the randomness" - Josh
For futures day trading I try to risk $100 per contract but depends of volatility; I don’t have in consideration the size of the account but if my mind is comfortable with it.