risk managment

[anurag bhargava]

hello traders,

 

I have startred trading with 500$,is it advisable to risk 5 % of capital. 

[Anton Nel]

anuragbhargava:

hello traders,

 

I have startred trading with 500$,is it advisable to risk 5 % of capital. 

Depends on how much risk you want to take. 5% of 500 means you are preparing to take the risk on 25.

Now there are two options to calculate for Stop-Loss and Volume (lot size):

1. How much volume size you want to trade then work out the Stop-Loss level to meet 25. 

Or

2. How deep Stop-Loss level you want then work out the volume size to meet 25.

 

Take-Profit Level can be 1:1 ratio or whatever you like. Break even / Trailing Stop is another option that able to reduce the 5% risk.

 

Some traders take 10% and others take 1%. Every trader has a different opinions on risk. Even some of them don't use the percentage ~ fixed lot size or fixed amount to risk. To answer your question: I think you need to have your own gut feeling on how much you want to take the risk.