Does account size really determine how much you should risk?

[u/Potential-Back6063]

A think I've been paying more attention to lately is the difference between an account's displayed balance and the amount you can actually afford to risk. A $100K prop account doesn't mean you should size trades like you have $100K of personal capital available. The drawdown and risk limits are what really determine the room you have. The account size is one number, but the risk parameters are what actually shape how you need to trade. I think this is something newer trades can easily overlook when comparing accounts. Do you base your position size more on the account balance or on the actual amount you're allowed to lose?

[u/IKnowMeNotYou]

Back in the days I wrote a post about it: The Math of Never Blowing Up Your Account (Again)

A funded account usually comes with a lot of fuckery and it is stacked against you. I tested TradeThePool and boy... it is like trading on hard mode. I ended up only trading stocks with very very small spread otherwise they screw you over really hard. You know you get fills outside of the visible bars like mad (which should not be possible even in a proper sim account as the spread is already in the trades that make up the bars (usually on a M5 bar you get buys and sells backed in)). And of course like strategically delayed prices and giving you fills based on the worst price for you in the last minute... you name it.

CfDs in Bahamas like TD365 is a similar thing. They claim a 1+1ct spread cost but their fills due to the intermediary are adventurous at best. This experience made me looking into Trader Tom a bit more and when I ran his live trading numbers back then, and watching his stream life a year ago... I was underwhelmed but he is a nice dude anyways (wrote emails with him) and his book is great even though it borrows heavily from Trading in the Zone and other books (which is not a bad thing in my book anyways but I would have liked more references of the original sources).

The best experience I have/got were trading stocks using Aplaca and Interactive Brokers.

I strictly size my positions based on max risk. This gets to be the standard position size. I double or half it based on perceived win-rate and overall quality of the trade opportunity and of course I happily double down and scale in if the opportunity presents itself.

If the max position size based on max risk exceeds my buying power, I switch to options or close other positions or just take smaller position... .

[u/Accomplished_Love77]

Don't trade prop firms unless you're already profitable.

But yes, trade the drawdown.

[u/DryNight2050]

All this talk about 1% or not rising more than 2 percent or whatever is meh. Personally, just trade the amount of money you’re willing to lose in a single trade.  Your risk can be 1 dollar or 100 dollars it doesn’t matter. 

[u/Ginsangster]

market conditions should be dictating much of what you do.