WHAT PERCENT OF YOUR TRADING ACCOUNT WILL YOU RISK ON EACH TRADE?
Very often, you will reduce your trade size and your risk exposure when you experience draw-down. Here you will identify what the best method is for doing that.
----> 2 percent maximum risk on each trade.
----> Using my average monthly win ratio and payoff ratio, mathematically calculate optimal percent to risk using the optimal "f" formula for each new trade.
-----> Using my average monthly win ratio and payoff ratio, use the risk of- ruin tables to find the best percentage to risk to give me a "zero" percent probability of ruin for each new trade.
-----> After a draw-down, I will reduce the percent of risk by 25 percent. For example, if I am normally risking 2 percent on each trade, after a draw-down I will risk only 1.5 percent.
-----> Other ideas ?