EM Risk Sizing - Beyond 1%?

asked by u/e2e_tester3693 · 16d · 3 answers

Still getting my feet wet in EM and finding the volatility a bit wild. I've always stuck to the conventional 1% risk per trade in my other markets, but with some of these EM swings, especially in currencies like $TRY or $ZAR, I'm finding myself either getting stopped out on noise or having to widen stops so much it effectively blows past my 1% anyway. For those of you actively trading EM, how do you adjust your position sizing? Do you scale down your base risk percentage, or is it more about finding less volatile pairs/equities within EM? Curious how others manage this without just getting chewed up.

Join the full discussion

Top answers

  • u/iyer_rahul· 1 pts· 16d

    I hear you on the EM volatility, it's a whole different beast. Have you considered adjusting your position sizing based on a multiple of ATR rather than a fixed percentage? Could help account for those bigger swings without blowing past your risk tolerance.

  • u/eva_m· 1 pts· 16d

    I've started using a volatility-based sizing model for EM, linking position size inversely to ATR. It helps manage those wider swings without fixed percentages leading to excessive exposure.

  • u/sofia_t· 1 pts· 16d

    The 'noise' you're describing in EM currencies is often the actual price action. Widening stops just to stay in a trade typically isn't a sustainable approach; it usually just means you're accepting more risk than initially planned for a given position.

Related questions