Expressing Trade Risk and Targets as Account Percentages
Summary
This guide advocates planning trade risk and profit targets as percentages of account equity rather than as fixed cash amounts or pip distances. Its example compares the same 10% risk allocation on accounts of different sizes to illustrate how the dollar exposure changes while the proportion remains constant. It also describes using a trading-platform script to display risk and targets in percentage terms.
The accompanying material is said to cover building a market watch list, screening out less attractive charts, and reviewing the remaining charts for possible entries. It notes that the script may run slowly if chart history has not been downloaded. No tested strategy, sizing formula, performance evidence, or guidance for choosing an appropriate risk percentage is provided, so the percentage framing is a planning aid rather than evidence of an edge.
Key ideas
- Evaluate trade risk relative to account size instead of focusing only on the cash amount.
- The guide describes displaying risk and targets as percentages through a platform script.
- It recommends screening a watch list and reviewing remaining charts for potential entries.
- Undownloaded chart history may slow the script, and no strategy performance data is presented.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.