What's your risk percentage per trade relative to your total account balance?

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For instance, if you have $10,000.00 in your account, how much are you comfortable losing in a day? Is a 3% risk, which amounts to $300.00 per day, too risky?
 

% 1 per trade ...

Only trade EURUSD,

25 pip stop with 1:4 leverage.

 

About the 25 pips stop ... I thought I should also point out that ... I'm a day trader and never carry any position overnight.

 
Alp Duman #:

% 1 per trade ...

25 pip stop with 1:4 leverage.

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin or leverage. No SL means you have infinite risk (on leveraged symbols). Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% account total.

  1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce, the stop goes below the support. Then you compute your lot size.

  2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/PIP, but it takes account of the exchange rates of the pair vs. your account currency.)

  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum (2017)
              Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum (2018)
              Lot value calculation off by a factor of 100 - MQL5 programming forum (2019)

  4. You must normalize lots properly and check against min and max.

  5. You must also check Free Margin to avoid stop out

  6. For MT5, see 'Money Fixed Risk' - MQL5 Code Base (2017)

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.

 
Thanks William for sharing a different approach with us ...
 
William Roeder #:

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin or leverage. No SL means you have infinite risk (on leveraged symbols). Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% account total.

  1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce, the stop goes below the support. Then you compute your lot size.

  2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/PIP, but it takes account of the exchange rates of the pair vs. your account currency.)

  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum (2017)
              Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum (2018)
              Lot value calculation off by a factor of 100 - MQL5 programming forum (2019)

  4. You must normalize lots properly and check against min and max.

  5. You must also check Free Margin to avoid stop out

  6. For MT5, see 'Money Fixed Risk' - MQL5 Code Base (2017)

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.

Thanks a lot William, I will apply this 2% and 6% from now on. Will check all of the links you provided, thanks!

 
I use 0.25% on a trade after a loss. Next trade I use 25% of the profits of my last trade, if I had one, for the risk. I keep doing this until my average win/loss ratio is filled or I have a loss.
 
You should only take into consideration YOUR risk appetite. If I risk 3% on a $100k account and I'm fine with it, that may be because I'm very experienced, or very wealthy and I'm fine losing big sums of money. But that doesn't mean it's the correct way. Find your max drawdown you're ready to endure, your risk appetite, and reverse engineer to find the appropriate risk per trade. Also, consider with your strategy what's the biggest losing streak you can get into.
 

It really depends on how you want to play. For example, I play without a stop loss with only DCA, i.e. i risk 100% of my capital all the time

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Ireneo Aldamia:
For instance, if you have $10,000.00 in your account, how much are you comfortable losing in a day? Is a 3% risk, which amounts to $300.00 per day, too risky?

3% is moderately risky in my opinion. I usually risk only about 1-2% per trade. Especially if you're day trading, that 3% ammount is certainly going to challenge your psychology if you're having bad months and long drawdown.

 
Ireneo Aldamia:
For instance, if you have $10,000.00 in your account, how much are you comfortable losing in a day? Is a 3% risk, which amounts to $300.00 per day, too risky?

This question is well answered by Kelly, Vince, Tharp. They all investigated the optimal risk per trade. In general 3% per trade is huge. The per day loss is mostly a discipline rule. Kelly found that the optimal result is obtained by risking a % per trade and almost all other methods descend from that. For practical reason It is useful to establish Your own risk per trade based on the track record of Your strategy and go with It. You do that with a forecast test.

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