Good rule here is not to risk more than 2 – 3% of your equity (total account balance) per a given trade. By trade I mean all of the position opened per a given currency pair at the moment. This is the advice I wish someone told me when I was starting.
This rule will protect you from desperately adding to a position when the market goes against you. It also will help you stay away from widening a Stop Loss. Also it will make the trading much more bearable emotionally. And that is important if you are to trade for a longer time. It might seem like it is limiting your profit potential, but the key to the success in the forex is gaining consistently, long term. The compounding effect will take care of the rest. I will write more about this amazing effect in the future.
That is how I trade. I risk 2 – 3% of equity and do not widen the Stop Loss. I look for high probability and low risk setup where the ratio of TP:SL (Take Profit : Stop Loss) is higher than 1.5. That means that I can gain more than I risk. In eToro gain model it means gain per a trade higher than 100%.
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