Bankroll for Forex
 

Hi all,

I know that there is a lot of debate within the forum about the advantages/disadvantage of trading Forex.

Suppose somebody was to decide it was for them, what % of their bankroll should be the maximum placed on any individual trade?

Any help on this or any advice on trading stategies/programs would be greatly appreciated.

Thanks a lot
Nick

Post deleted by Mat Sklansky
 

Re: Bankroll for Forex
 

for a project i was working on, i heavily researched forex trading, and at the retail level, the consensus is that you're basically handing banks/platforms/market makers money because the spread they charge is just too much to make any money. this makes trading forex comparable to playing a 3/6 limit game with a 5/pot rake.

that being said, the amount to put on forex depends i suppose on your level of expertise and the overall volatilty of the forex market at the given time.

Re: Bankroll for Forex
 

It depends on how actively you're planning on trading. If you're planning on making several trades a day I'd say plan on losing maybe 0.5% of your investment capital on any given trade at most, and hopefully you'll figure out what you're doing before you go broke. If you are planning on trading less frequently you could bump it up to 1% max loss/trade. Losing 1% of your IC on a single trade my sound like nothing until you figure out that a bad streak of say 20 losing trades/7 winning will set you back 13%, and that could accur in 3-5 days depending, like I said, on frequency. A bad month at 1% will demolish half of your entire investment capital, less if you scale down as your br diminishes. Plan accordingly.

Also, in the beginning focus on accumulation of knowledge/experience more than immideate paper profits which seriously will mean less than nothing in the long run.

Kirk

Re: Bankroll for Forex
 

[ QUOTE ]
for a project i was working on, i heavily researched forex trading, and at the retail level, the consensus is that you're basically handing banks/platforms/market makers money because the spread they charge is just too much to make any money. this makes trading forex comparable to playing a 3/6 limit game with a 5/pot rake.

that being said, the amount to put on forex depends i suppose on your level of expertise and the overall volatilty of the forex market at the given time.

[/ QUOTE ]

are you talking spot or futures or both?

Barron

Re: Bankroll for Forex
 

Str8 up forex it is Standard to have 1000 to 2000 pip.(similar to poker bankroll) 1000 pip downturns are normal and can go over years. Futures is where 1% position size is standard.(sports betting)
You should do your own calculations based on ev and sd.

Re: Bankroll for Forex
 

[ QUOTE ]
Str8 up forex it is Standard to have 1000 to 2000 pip.(similar to poker bankroll) 1000 pip downturns are normal and can go over years. Futures is where 1% position size is standard.(sports betting)
You should do your own calculations based on ev and sd.

[/ QUOTE ]

i can't comment on "bankroll" but i can say that when you do your own calculations on EV and St.Dev you must also take into account correlations as that affects portfolio risk substantially.

Barron