How do you calculate best optimal MM risk % per trade?

europound

Newbie
May 22, 2015
3
0
2
I've got 1000 USD and a strategy that makes sense and has a good profit factor.
But how do I calculate best optimal fixed fraction % for it?
Clearly if I risk 1% or 2% per each trade, I am not going anywhere and equity is not utilized at its fullest potential...
on the other hand if I trade let's say risking 90% of equity on each trade, I am playing with fire and about to blow up my account, right?
So how do you calculate best MM FF% ?
What do you use for educated guess then?
 

Enivid

Administrator
Staff member
Nov 30, 2008
13,246
558
144
Odessa
www.earnforex.com
You base it on the distribution of wins/losses and also on the size of those wins/losses. If you have enough backtesting history of your strategy, you can emulate the trading process using random numbers based on the probabilities and sizes derived from your backtesting history and calculate the maximum safe %.
 

globalfx

Trader
Feb 24, 2014
44
1
19
You don't have to crack your head too much. I will recommend a strategy calculator or a Margin Calculator Precisely. With these calculators you could tell how much of your capital is used when you enter certain number/volume of trades.