So how much risk should i use per trade?

[#1]

If i wanted to make a decent profit how much of my trading capital should i use? those guys from traders corner say 1%. however 1% is not going to pay the bills? so im stumped, not sure how much to risk is needed to make decent profit....

[#2]

I think you are understanding the concept wrong. You need to risk 6% of you capital over three trades (2% risk per trade). So if you have R100k you are prepared to loose 6% (R6k or R2k per trade). So you can take three trades of R33k each and risk loosing R2k (2%) on each making up your R6k risk (6%). That is the most conservative way to build a portfolio. Maybe consider taking one of Simons intro courses for free (look under help or education or on the home page for upcoming courses. Also read up on this under education. Hope this helps you understand it better.

[Rams]

Also, remember your reward/risk ratio. Should be 3:1. So for every 2000k you are willing to risk your projected reward should be 6000k. If one trade is a winner, then you should be up 2000k which is 2% return on your initial 100 000k.Your win ratio will be 1:2 or 33% but you still up 2%! Its late, I hope thats all right,eh, Ninja, wall street is closed now.

[Ninja]

Rams, not sure what you talking about me and wall street for? I hope you have come to a more informed understanding re the macd indicator on ig charts than your post below states - I am looking at their chart as I type......macd histo has nothing to do with crossing the zero line on ig as your statement below so eloquently states, it is as it should be....a crossing of its own MA known as the signal line.This crossing can occur above or below the zero line meaning you can have a downward crossing (macd crossed its signal line from above) above the zero line and even though the macd is above its zero line, the histo will be red. I don't have a huge opinion on ost charts but if you want to comment on the histo on ig please make sure you know your facts. Oh and Rams you can colour the histo any colour you want, thats why some are blue....colour irrelevant to the histo, just like the zero line. Re:Charting - MACD by Rams on 06 Feb 22:03 Ninja, read my post again, it was a response to the topic posted by GENO regarding the MACD HISTO on OST.GREEN ABOVE ZERO AND RED BELOW ZERO ON OST CHARTS and configured to MACD crossing ZERO line. Even on your IG charts, RED below Zero and Green above.You are correct regarding the signal line but OST charts configures MACD croosing Zero. Some HISTO also have blue....

[Rams]

Chek my post on MACD again.Anyway, I have always wondered, what are you trading or doing on OST if you with IG and foreign markets? I sense that this trading thing is not only a business to you but a passion ....

[Ninja]

Rams, I have put your post here....please read your own post - it clearly comments on how the macd is plotted on IG charts unless you cant understand your own post? I am simply enquiring if you have had the chance to get the correct facts about the macd histo on ig charts as your above stated post re macd on ig is clearly incorrect.

[#7]

thank you for the quick response. i will now make sure my total risk on all open trades does not riks more than 6% of my total trading fund. now i will phone ost today and ask for a explanation on how to calculate profit & loss per cent move of the cfd/index future i trade so as to know where is my best entry point. it is totally useless trading with out making enought profits. it`s like shooting yourself in the foot. anyway thanks again for the info.

[SimonPB]

Mrtrader3 .. you're focusing on the profit which is completely wrong .. forget about the money and focus on being a trader (trade to trade well) .. if you succeed as a trader, then profits are a natural out come from that .. but focus on the money and you're in for a heap of pain ..

[#9]

Simon, I think I know what you are trying to say (focus on the system, rather than the profit) but I don't think your comment is in line with the question. You have to have some sort of end game in mind. If you are taking 1% risk each time, but only making 1 trade per month, then that is hardly worth the effort is it? (Unless you are making 10% return maybe!)Mrtrader, I have a thread on this topic still visible - it is just a thought, not a cast in stone rule.

[#10]

Rams, why would you limit your reward? You should not be setting a target profit but trading the trend/price. Sure set an initial exit (especially the downside) but when the profit comes have an alert to indicate target met. Then re-evaluate your prosition and maybe take 30% of the table. You re-adjust for further growth if any and then set new target. Take the next 30% when target 2 reached, Rinse and repeat for the next 30% and then just leave the last 10% to run wild or until you get stopped out. Thats max profit with min effort. As SImon and many have said there are only two mistakes a trader makes
1 - Dont adhere to stoploss
2 - take profits to early

[TOPIX]

@MrTrader3. If you cannot pay the bills with your 1% risk you are Undercapitalized. Too small equity causes bad risk management - period. The best money management plan is one that suits your personality, your system and your skill level. Even the 1% or

[SimonPB]

No .. the end game is to be a successful trader, not a profitable trader .. the later is too narrow and focuses in the wrong direction as trading is a heap more then the profit .. also as humans we have a very bad relationship with money, so focusing on the money is going to lead to failure in almost all cases (I would like to be as bold to say in all cases - but well nothings 100%) ..

I made the comment because the initial question said "make a decent profit" and "is not going to pay the bills" - hence focusing on the profit and indicating a mind set (goal is to make money, not to be a good trader), in a sense not even yet a trader and already ordering the Lear jet (cart before the horse) ..

Lastly .. number of trades per month not important .. it is about how the system is set up .. that one trade could be a low risk trade right at support with a risk reward sitting at around 5x .. example I buy XYZ at R305 support/stop is R300 so risk is R5 and I got R100k means I buy for R2k risk = 400 XYZ (actually 327 as you only have R100k). It goes to R335 and I just made almost R10k or 10% .. now if you geared that you could drop to 1% risk per trade and do sweetly ..