I think the lower your risk level, the better (1% or less)! If you have a good system and an edge, why not give it every opportunity to succeed and paly out??
That is a very broad description of what type of EA you are looking for. Try making it a bit more specific so that users can help! Trading style? Currency pairs?
I think there both pro's and con's to demo trading. I would definitely give demo trading a try first, to get to grips with things and understand the basics of trading. You can practice different styles of trading, get to know the average movements ...