What's your risk percentage per trade relative to your total account balance? - page 2

[Angelo Duca]

on a 10K account I would trade max 50cents per pip per trade.

[Chokhmah Yada]

First decide what is the Maximum amount where you draw a line in the sand and say to yourself; No more than this amount $$. Example say you have 10,000.00 you may decide, ok I will lose no more than 8,000.00. In this example you know that your total risk is 80% to total balance, so you have 8,000.00 for ALL you trades. Anyway you decide to risk your 8,000.00 on one trade and surprise surprise you lost this 8,000.00 and you put your tail between your legs and go crawl into a corner and lick your wounds, while going over you failed trading strategy (Chances are it's not the strategy BUT your execution). So you start again.

Total balance: 10,000.00, Maximum Total Lost 80% (8,000.00), this time you give yourself a few additional requirements.

1. Maximum Daily Lost 10% of your Maximum Total Lost which is 800.00.

2. You calculate the commission that is being charged to you ie. (1.50 - 3.00 per lot, per trade) and then you calculate the spread between the selling price and the buying price. THIS ADDS UP!!!

EXAMPLE: XAU/USD it is not unusual for the spread being 13 - 30 pip's on a standard lot that's 13.00 -30.00 per lot with a standard lot of 100 oz at 1.00 per pip. You decide to trade Five (5) lot's, let's say there is a 13 pip spread x Five (5) lots = 65.00 plus, 3.00 commission x 5 Lots = 15 for a total of 80 dollars divided by Five (5) dollars a pip = 16 pips in the hole before any profit. 

3. So with that example, 65.00 spread cost plus 15.00 commission for a total 80.00 side . Which would leave you with roughly 720.00 to actually to work with. Now, if you remember you're trading Five (5) lot's so instead of 1.00 per pip now you're trading at 5.00 per pip.

Example: 720.00/5 = 144 pips Stop Loss to play with which is "NOT" very much of a buffer.

A proper buffer with gold is a minimum of 300-600 pips variance. In this case a 1.5 Lots trade would be better: 13 pip spread x 1.5 = 19.50 plus, 3.00 commission x 1.5 = 4.50 for a total of 24.00 divided by 1.5 = 16 pips in the hole before any profit, BUT 776.00/1.5 = 517.333 spread to work with to make a profit.

[Nardus Van Staden]

Your risk tolerance and discipline should align with your character, a 2% risk is a fair percentage, and also the correct way to prevent massive drawdowns, in this way you will build a portfolio over a long time horizon, and this can then be presented to institutes if you want to become a professional trader one day. 

[tdtsz]

It depend on your account, usually small account 3-5%, big account 1% i believe is reasonable

[Conor Mcnamara]

if it's a small account, I think 3% risk is ok. From backtesting I see that too many losses will inevitably occur with a 1% risk or less (if you're not making high precision entries)

[Nathanael Ricardo Diaz]

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?

1-2% per day, 3% is fine which is a little aggresive for my taking. Risk depends on your trading system. You need to figure out the comfortable style which could take your trading long term and gain profits.

[Jarnail Singh]

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?

Risk management can never be fixed or same for multiple accounts, multiple strategies, multiple markets and multiple people. It varies depending upon these factors and more.

For someone with 10k account, and trading 10 trades a day, 0.3% risk per trade might be high, if all go wrong and someone trading 1 trades a day, 3% risk per trade might be high.  For some losing 50% of account is nothing (Look at many crypto traders) while others might feel hopeless losing 10%. It varies a LOT

In my opinion, in a rule based system, risk should be per trade and not per day. Per day model might be appropriate in some equity based systems but in a statistical model based on past performance of a strategy, trade based risk makes more sense. Generally 0.25 - 1% per trade is common, but general things do not work for everyone and ever strategy.

As @Luca Norfo wrote above correctly, Tharp, kelly and few others have greatly explained many MM techniques in many articles and even books and it boils down to the type of strategy. Using kelly model with a proven robust high win strategy, one can highly increase the return or CAGR. But note the word "Proven robust" which means that the strategy is extensively stress tested on past data, for example Montecarlo simulations and many more. Even then markets can change and come up with something which has never happened with past( a new regime), so even such strategies might fail with an aggressive MM.

So in summary, make a fully rule based strategy, analyse it well. Stress test it well. And then always keep risk far lower than analyzed. An edge without proper risk management is nothing.
Hope this helps.

[Jonathan Antonio Lao]

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?

1-3% per Trade.

i use this lot size calculator to calculate the risk: Lot size calculator

[Daniel Khen]

Depending on the strategy, number of trades per day, et cetera... most cases I don't want to risk more than 1-1.5% per day