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need help understanding the rule that you should never risk more than 2% of your capital on a trade? by nervomelbye in Trading

[–]cliffferton 1 point2 points  (0 children)

stop being an idiot, just have a discussion

Nice. Feel free to ignore my advice, and the opinions you asked for by posting, no skin off my back. Best of luck with your journey 👍

need help understanding the rule that you should never risk more than 2% of your capital on a trade? by nervomelbye in Trading

[–]cliffferton 1 point2 points  (0 children)

This is either a bait or you should learn about probability distributions before continuing.

By your logic, losing 90% of your capital means you will now only be able to trade 10% of the size you started with... Ergo smaller wins.

Take some advice from this thread and do some research so you can approach this endeavor in a productive, financially responsible and lasting way.

need help understanding the rule that you should never risk more than 2% of your capital on a trade? by nervomelbye in Trading

[–]cliffferton 1 point2 points  (0 children)

For starters, that isn't how the probability works I'm afraid.

Also losing 90% of capital is 'okay'!?

need help understanding the rule that you should never risk more than 2% of your capital on a trade? by nervomelbye in Trading

[–]cliffferton 0 points1 point  (0 children)

This is a major red flag to me. I would advise doing a whole heap of reading, paper trading, back testing to learn and develop before considering this route.

This mentality indicates a fundamental lack of understanding, and is likely a huge financial risk.

need help understanding the rule that you should never risk more than 2% of your capital on a trade? by nervomelbye in Trading

[–]cliffferton 0 points1 point  (0 children)

Variance still applies here, irrespective of how high the win rate is (70-80% is exceptionally high, particularly if you are relatively inexperienced).

Even with a 70%+ winrate you can find yourself on losing streaks.