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0_public:trading:2pct_rule [2024/10/23 21:03] – removed - external edit (Unknown date) 127.0.0.10_public:trading:2pct_rule [2024/10/23 21:03] (current) – ↷ Page moved from trading:2pct_rule to 0_public:trading:2pct_rule pointnm
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 +====== 2% Rule ======
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 +One popular method is the 2% Rule, which means you never put more than 2% of your account equity at risk. https://www.cmegroup.com/education/courses/trade-and-risk-management/the-2-percent-rule.html
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 +The 2% Rule also creates a structure for your trading decisions, as illustrated in Table 2. For example, assuming you have a USD 50,000 account and you want to buy 5 Canadian Dollar contracts, the 2% Rule tells you that you could risk no more than 20 ticks on the trade (5 contracts x USD 10/tick x 20 ticks = USD 1,000). If you wanted to operate with a more liberal 50-tick stop, you could only buy 2 contracts. Similarly, if you wanted to buy a larger position, say 20 contracts, you could risk no more than a scant 5 ticks. https://www.cmegroup.com/education/courses/trade-and-risk-management/the-2-percent-rule.html
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 +Once you have a stop level, then you know the trade’s risk. For example, if your stop is 50 ticks from the entry price and each tick is worth $10, then your total risk for one contract is $500; if each tick were worth $5, then you could have a position size of two contracts and still maintain your risk at $500. https://www.cmegroup.com/education/courses/trade-and-risk-management/proper-position-size.html