How much risk to take.

[Yenren 1]

Hi,

I know this will be highly personal but I would like to know what has worked for others.  So I have started trading in the sim and am trying to decide 

how much paper "risk" to take and how to plan my progression to live trading. I am trying to decide whether to paper trade from the beginning with my max risk 

Let say $250 and get comfortable with that number then when moving to live account begin with $20 then $50 and increase in $50 increments up to $250. Option two Is to  

follow the same progression in the sim as I would in the live account so start in the sim with $20 and continue as above. I am leaning towards the side of following the progressing as 

I would in the live account but you  like to know what you guys think?

[Bryan W 50]

It's definitely a question that brings subjective answers. In my opinion, $250 is WAY too much risk to begin with unless you're dealing with $100,000 in equity, but even then, why would you risk that much when you'll probably have a lot of negative days in the beginning? Aiman talks about staying in SIM for 8 months before going live, and then starting out with a $5 risk. NO, you probably won't be very profitable if you're only getting a 2 to 1 risk to reward, but you're learning how to be a consistent trader, without a tremendous amount of stress. My suggestion, start small and move up as you become more consistent. Also, I highly recommend trading in SIM, as you would be trading live. A lot of people use HUGE and unrealistic size for a new trader in SIM, then get a big wakeup call when they go live and lose $1,000 the first day. I've seen a lot of people come and go in the last three years that played that game. Focus on consistency, and be conservative; this stuff takes time to learn.

[Alastair 114]

Rule of thumb floating around internet is 1% of acct, BUT when I started trading I learnt that was too high and had to revise to 0.3% of my acct until I became consistent. 

As u lose money u will lose less money bcoz u risk 0.3% of a smaller acct.  As u grow the acct u risk more money, winning bigger.  When u feel ur r consistent increase by 0.1% every consistent week or month.

 

[Yenren 1]

Thanks