Everyone talks about only risking 2% per trade, but why 2%? Why not 3% or 30%? I’ll show you why.
/thread
Too small, and you’ll never make any money. Positions too large will put you out of the game before you’ve had time to strike it big.
![](https://pbs.twimg.com/media/DaSkl-mUQAEi5CQ.jpg)
This is a key idea: if you run out of capital, you’re out of the game - so don’t take position sizes that will put you out of the game if you’re wrong.
![](https://pbs.twimg.com/media/DaSkwFuUQAYzaZ6.jpg)
![](https://pbs.twimg.com/media/DaSk3VfVMAUZHuq.jpg)
1. We are taking higher risk that is not adequately compensated by higher returns and
2. At the 5% risk level, 2% of traders have gone bankrupt.
![](https://pbs.twimg.com/media/DaSlAhuUMAAtKgL.jpg)