Need clarification on Fixed Fractional Money Management

Hi All,

I am in the process of learning few aspects before put my money for trading in stock market.

From various sources I went through some technical analysis and money management. In money management I am little confused with Fixed Fractional Trading. Lets assume that I am risking is 3% of capital in each trade and want to trade NIFTY, below is my assumption of how I should go about.

Capital - 1,00,000
Current NIFTY - 5670
NIFTY Margin for one lot - 28,500
Stop Loos I going to keep is - Rs. 30 (stop loss - 5640)
Risk @ 3% on 1 Lakh - 3000
Total risk for 1 lot NIFTY - 1,500 (SL 30 * 50/lot)

Does this mean I can trade 2 lot with a capital of 1,00,000. Reason I am confused is, somewhere I read that a trader should not use more than some percent of his capital in single trade. If that % is 10 which means I shall use only 10,000 for a trade and I can't buy 1 lot with this margin.

Request clarification on this.


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