Basic question about Increasing risk level and Position sizing

Hey traders,

I had a very basic question that I just wanted to confirm

I trade with a capital of 5 Lakhs and risk 0.25% ( Rs 1250) per trade and make anywhere from 5-10 trades a week

I wanted to increase my risk level to 0.5% ( Rs 2500) per trade

and as I get confident further increase it to 0.75% and 1% in the future

However when I use a risk level of 0.5%, in some of my trades, the overall position becomes too big and above my 5 Lakh Limit - preventing me from making the trade.

So does this mean that to risk 0.5% of my capital on each trade I would have to start trading with Leverage (Margin/ Futures contracts)?

Just wanted to confirm this,



Well-Known Member
What's wrong with the leverage if you have predefined risk per trade
I do not know if I have got this corectly but what you are saying is that you want to increase your risk but you are not allowed to go higer. If you cannot go higher then it is for a good reason. We all know the importance of having less risks. Rase your risk percentage t the accepted percentage. If it cant go higher then leave it as it is.

Pradeep Narayan

Well-Known Member
A higher risk on capital deployed can come from:
a. Larger volume or position with same stop loss parameters as earlier low risk trades.
b. Same margin or position but with a larger leeway for losses and hence planned profits.

You arrive at a good mix of both based on your trading pattern or plan and then scaling will happen.

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