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Yacob Hassan

How Much You Risk Your Account Per Week?

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Some times I use risk more than 30% while trading. In that type of situation I will be in fear until I get some good return from it. But taking risk in trading is important to get some good profit.

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My trading philosophy is very simple. I risk money that I can afford to lose and usually I will only risk 50% of that sum and not the whole sum at one go.

 

You'll risk 50% of your capital on 1 trade? Wow.

 

That's some serious risk or faith in your system.

 

:\

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My trading philosophy is very simple. I risk money that I can afford to lose and usually I will only risk 50% of that sum and not the whole sum at one go.

 

Only 50%? I usually go at least 80% on a trade. I mean, c'mon thats how you make the big bucks. Just hopefully that first trade or two is not a loser, than you screwed.

 

You'd be better off going here:

zt911w.jpg

 

At least there, they will give you free drink and you'll be surronded by pretty woman before they take your money.

 

Risking that much is a recipe for disaster.

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Woah 50%?! Geeze. 30% is quite a bit too. vinodg, you're referring to a given week and not a single trade right? As for me I treat each day individually so I don't have a set number for the week. My theory is this: The market doesn't care if i just lost a certain percentage of my account, so unless it's for psychological recuperation or reassessing my system's reliability, I wouldn't see a point in halting my for the remainder of the week simply because I'm down. But that's just me.

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He didnt say that he risks 50% of his capital. He said he risks 50% of a sum he can afford to lose. What he can afford to lose might mean his entire trading capital or it might mean $100, if "afford" means to afford emotionally, i.e. which sum can he afford to lose so he can handle it emotionally without difficulties.

I guess that when deciding how much to risk one must consider both aspects: statistical and psychological. Statistical aspect tells him that he needs to risk only that much so he preserves enough capital to stay in the game. Psychological aspect tells him to risk only that much so he can handle the drawdown emotionally.

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He didnt say that he risks 50% of his capital. He said he risks 50% of a sum he can afford to lose. What he can afford to lose might mean his entire trading capital or it might mean $100, if "afford" means to afford emotionally, i.e. which sum can he afford to lose so he can handle it emotionally without difficulties.

I guess that when deciding how much to risk one must consider both aspects: statistical and psychological. Statistical aspect tells him that he needs to risk only that much so he preserves enough capital to stay in the game. Psychological aspect tells him to risk only that much so he can handle the drawdown emotionally.

 

Fair enough, he will loose that sum at some stage :)

 

The way to set your psychological limit is by knowing your ror and using that to make your judgement other wise you are just guessing. Guessing is OK if you guess conservatively. Low % methods with high R:R have higher RoR as you might expect.

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Even with good money management, it can be stressful taking multiple 1-2% drawdowns. 50% is suicide for most, but I know some people who did 100% and it did pay...but they are the exception, most end up blowing out if they play like that.

 

I believe that would be called luck, unless those people had systems with a 100% winrate.

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5% at max in a week

 

Hey maildigger...I'm just starting out and my plan is 0.5% per trade, no more than 2% for the day and 5% for the week, and 10% for the month.

 

Does that sound good to you?:)

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Hey maildigger...I'm just starting out and my plan is 0.5% per trade, no more than 2% for the day and 5% for the week, and 10% for the month.

 

Does that sound good to you?:)

 

Ok, you didn't ask me, but I have a question... Are you developing a plan for you, or for maildigger? If for you, why does it matter if it sounds good to someone else? Shouldn't your plan be one you are comfortable with?

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Guest ivanbaj
Hey maildigger...I'm just starting out and my plan is 0.5% per trade, no more than 2% for the day and 5% for the week, and 10% for the month.

 

Does that sound good to you?:)

 

Sounds good. But in the beginning it will probably mean that you will loose "0.5% per trade, 2% per day and 5% per week, and 10% per month" at least. Make sure you can take that.

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Sounds good. But in the beginning it will probably mean that you will loose "0.5% per trade, 2% per day and 5% per week, and 10% per month" at least. Make sure you can take that.

 

:o I hear ya............

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Ok, you didn't ask me, but I have a question... Are you developing a plan for you, or for maildigger? If for you, why does it matter if it sounds good to someone else? Shouldn't your plan be one you are comfortable with?

 

Hi...I'm just starting out and hoped to get some advice from experienced traders on this board. I know what you're saying, but as far as money management goes, I think there are some "cardinal rules" that successful traders all have in common. Hope that answers your question. Cheers

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Hi...I'm just starting out and hoped to get some advice from experienced traders on this board. I know what you're saying, but as far as money management goes, I think there are some "cardinal rules" that successful traders all have in common. Hope that answers your question. Cheers

 

Yes, the cardinal rule of successful traders are that they do what fits them and their system/methodology and not what fits another person.

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Yes, the cardinal rule of successful traders are that they do what fits them and their system/methodology and not what fits another person.

 

Hi...Yes, I realize that all traders have different "system/methodologies" that fit their personality. But, I think that all successful traders have similar money management strategies. This is what I'm getting at, not to copy someone's entry or exit method.

 

For example the 2% rule. I believe successful traders follow this rule religiously. Most probably risk even less than 2% on a trade.

 

If your saying it's perfectly fine to risk 25% on trade, if that's the way you want to do it, I'm afraid I'll have to disagree.

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Hi...Yes, I realize that all traders have different "system/methodologies" that fit their personality. But, I think that all successful traders have similar money management strategies. This is what I'm getting at, not to copy someone's entry or exit method.

 

For example the 2% rule. I believe successful traders follow this rule religiously. Most probably risk even less than 2% on a trade.

 

If your saying it's perfectly fine to risk 25% on trade, if that's the way you want to do it, I'm afraid I'll have to disagree.

 

I don't recall saying 25% is fine, although I cannot see how you can disagree with the position sizing method of another person without knowing anything about his method or risk tolerance. If someone has a screen and ranking based method that buy the 4 best stocks every week in 4 equal amounts then in effect he is risking 25% on each trade.

 

Anyway, if you believe that one size fits all regardless of the strategy used and this works for you, then continue to do so and don't change. In the end you are responsible and not other people, so you have to do what you believe to be correct. One last thing... remember that asking for advise doesn't help much if you only want to hear answers confirming what you have already decided the answer to be.

 

Best of luck in your trading.

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One last thing... remember that asking for advise doesn't help much if you only want to hear answers confirming what you have already decided the answer to be.

 

 

 

Hi...somehow this discussion has gotten off track!...:o

 

The question was how much should a trader risk for the week, and I think 5% was a good suggestion from maildigger, and you didn't agree. So, we'll just leave her at that, alright. :roll eyes: Cheers bro

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Hi...somehow this discussion has gotten off track!...:o

 

The question was how much should a trader risk for the week, and I think 5% was a good suggestion from maildigger, and you didn't agree. So, we'll just leave her at that, alright. :roll eyes: Cheers bro

 

Unfortunately, you are completely missing the point. Oh well...

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