Maximum risk percentage | Psychology and Money Management


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Maximum risk percentage

  #17 (permalink)

Potomac, MD
 
Trading Experience: Intermediate
Platform: ToS, NT
Broker/Data: TD Ameritrade, IB
Favorite Futures: QM/CL
 
reno57540's Avatar
 
Posts: 161 since Oct 2012
Thanks: 120 given, 213 received


Leon of Pizza View Post
I'd like to know how it works out. Also, I'm curious about something: did you first set your risk limit and then design your trades around that number? I'm not saying its wrong, just that it looks coincidental and the size of your stake is probably random.



The $1 stop came from market observations . I realized that more often than not I would get to my profit target before a trailing stop of $1 was hit. The method is only marginally profitable and that is why increasing the position is necessary to make real $$$.

I have actually done a lot back testing this week and realized that a $0.75 is almost as effective as the $1 trail. So my plan at this point is to increase my position to 2 cl contracts and use a $0.75 trail stop, that would trail closer and closer as the market goes in the right direction. With 2 contracts and a $0.75 trail stop I am barely above a 2% max loss per trade.


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