I have been actively daytrading for around 7 years now, the first 1 or 2 years I got into stocks and wasn't that serious, but then after that I got into forex and my learning curve skyrocketed as I liked it and felt more comfortable and familiar with it.
I never really considered doing it full time but looking back at my performance on the past 2-3 years I've been able to achieve consistent profits using a $20k account, my risk per trade was about $500-1k per trade (using 2-5 contracts which is basically a $20-50 P/L per pip).
Looking back now that I'm about to state something in the next paragraph, I figured 5% risk per trade is quite high... and it reflects in my drawdown at times which reached as high as 25%
I achieved decent profits and grew my account by a fairly good amount, I'm not going to state numbers because I don't want to deviate from the main point and provoke a fight between, people always seem to argue about that on here and other FX forums, so I'd really just like feedback from people who are considered experienced or professional day(or active)traders.. again, I am not looking to know if you're personally in favor or against active trading or if you recommend I follow a different strategy. Please move on to the next post if you don't have insight on my particular question
The question: If you were given the opportunity to actively trade a $1 Million dollar account for someone, how much risk per trade would you personally use?
I'm just looking to know what different people think, I already have my mind set at 0.5-1% per trade but I'd like to know what other professional traders think, especially those more experienced than me and already doing it full time.
My rationale is that with a $1M account trading for someone else, you want to be more conventional and aren't gonna have the mentality of "Oh I wanna double or triple my account", heck not even targeting 20% a year, that would be a great achievement. Sure you can achieve great returns on a $5-10k account taking bigger risks of 5-10% a trade, but you don't have as much risk on the line as a $1M account where a similar % risk would be $50-100k which is 10x bigger than the small account
But then at the same time, I also think what's the point of having a $1M account if you're risking $5-10k per trade if you know your drawdown doesn't usually go beyond a past point, you could argue that using just $200k could be enough for an experienced trader using decent leverage?
Forgot to mention, I've traded $100k in the past for someone and used 1-2% risk per trade, I noticed I was achieving the same level of profits as my personal $20k account but of course I was much more comfortable with the risks knowing its less %
I'd love to know your thoughts, thank you!
Submitted June 02, 2020 at 07:47PM by DxbLoveForLife https://ift.tt/3cnEhLv
