Are You Taking the Right Risks in Trading? Best RISK Per Trade

2 ส.ค. 2023

https://www.tradingview.com/x/smxiZY2V/

What portion of your equity should you risk for your trading positions?
In the today's article, I will reveal the types of risks related to your position sizing.

Quick note: your risk per trade will be defined by the distance from your entry point to stop loss in pips and the lot size.

🟢Risking 1-2% of your trading account per trade will be considered a low risk.
With such a risk, one can expect low returns but a high level of safety of the total equity.

Such a risk is optimal for conservative and newbie traders.

With limited account drawdowns, one will remain psychologically stable during the negative trading periods.

🟡2-5% risk per trade is a medium risk.
With such a risk, one can expect medium returns but a moderate level of safety of the total equity.

Such a risk is suitable for experienced traders who are able to take losses and psychologically resilient to big drawdowns and losing streaks.

🔴5%+ risk per trade is a high risk.

With such a risk, one can expect high returns but a low level of safety of the total equity.

Such a risk is appropriate for rare, "5-star" trading opportunities where all stars align and one is extremely confident in the positive outcome.

That winner alone can bring substantial profits, while just 2 losing trades in a row will burn 10% of the entire capital.

🛑15%+ risk per trade is considered to be a stupid risk.

With such a risk, one can blow the entire trading account with 4-5 trades losing streak.

Taking into consideration the fact that 100% trading setups does not exist, such a risk is too high to be taken.

The problem is that most of the traders does not measure the % risk per trade and use the fixed lot. Never make such a mistake and plan your risks according to the scale that I shared with you.

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