Money Management Rule of Thumb Question

Guys,

what's a fantastic rule of thumb when it comes to money management!

If you had say $50,000 into account. How much in trades must be in the market at one given time. 10%, 15%, 25%, 50% or even more?

Considering you are interested in being conservative to moderate level of trading.

Your input would be greatly appreciated.

Have been trading for previous year and looking to go somewhat bigger. https://forexintuitive.com/attachments/1527601436.png

I was leaning toward 10-15% percent of account at the same time also.

Here is what I was thinking.

$100,000 Complete

$50,000 in Bank (emergency functions ).
$50,000 in broker account
With roughly 10-15% employed in trading. ($7,500 in transactions at the same time)
Which equals to 7.5 normal lots at 1 percent or $1,000 margin per lot.

Tell me what your think! Is this thought conservative, moderate, agressive?

Quote:

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Originally Posted by ;

I had been leaning toward 10-15percent of account at one time too.

This is exactly what I had been thinking.

$100,000 Complete

$50,000 in Bank (emergency functions ).
$50,000 in broker account
With roughly 10-15% used in live trading. ($7,500 in trades at one time)
Which equals to 7.5 normal lots at 1% or $1,000 margin per lot.

Tell me what your think! Is this considered ultra-conservative, conservative, moderate, agressive?

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That looks good to meI would do the same.

With 10-15percent of your account is between conservative and moderate to me.

Thanks, I believed 10-15% would be conservative-moderate.

When time is right in certain market condition may have to 25% and thats about it.

Thanks guy.

Incorrect question in my opinion. The question should be: How much risk am I prepared to take within my portfolio at any 1 time?

Its absolutely possible to get your 10-15percent in used margin, however minus risk concerning market-movement (in the case your rankings have developed in your leadership, along with your stops are at break-even or greater ).
Its also possible to get only a 3% margin utilized guess, but have a very high percentile of your account-value (or perhaps greater than this ) at risk (in the case your stops are very far off, or you dont use stops at all). It makes much more sense to keep track of your risk, rather than just use a tricky percentile of your account cash. Personally, I have never more than 1 percent at risk per trade, and never more than 7% of the whole portfolio.

7 percent of entire profolio at the same time in trades??
Please explain.


Thanks

Quote:

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Originally Posted by ;

Wrong question in my opinion. The question must be: How much risk am I willing to take in my portfolio at any one time?

Its absolutely possible to get your 10-15% in used margin, however near zero risk in terms of market-movement (in the case your positions have grown in your direction, and your stops are at break-even or better).
Its also possible to have just a 3% margin used guess, but have a very high percentile of your account-value (or perhaps greater than that) at risk (if your stops are very far away, or you dont use stops whatsoever ). It makes much more sense to track your risk, instead of simply use a hard percentile of your account money. Personally, I have not more than 1% at risk per transaction, rather than more than 7 percent of the entire portfolio.

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Quote:

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Originally Posted by ;

7% of whole profolio at the same time in trades??
Please explain.


Thanks

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Sorry, the very last words should have read: 7% of my account value at risk.

For instance, say I have $10000 in my account. I go long 50000 EUR/USD, and enter a stoploss 20 pips away. If I get stopped outside, I loose 100$, thats 1 percent of my account, therefore I risk 1%. If I enter additional simmilar trades at precisely the same time, I risk 7% of my account.
If after all 7 transactions move in my path, and I could move my stops to break-even or further, I have 0% at risk, and could enter more trades.

Amount 1 Money Management Rule of Thumb:

Nomatter how Great and sure the trade is never risk more that 2% of your Funds on one single Transaction

I always use 1-2Percent per trade, maximum 10-15Percent of my account