Taking Risk too much of capital on a single trade is one of the most terrible mistakes that any trader can commit. It is for sure that the if you lose all your capital, you are out of the field indefinitely. There is a meaningful saying in poker that going all-in works every time but once. The same applies to the Forex trading in that if you risk all of your account on every trade, it only takes one loser to wipe you out and it is only a question of time.
Generally, you should risk only 1-3% of the available capital shared to a system on any individual trade. This calculation is done by using the size and, the difference between our entry price and our maximum stop price, and the amount of capital that is allotted to the system.
If these things are combined, you can assure yourself never to loose all of your trading capital. Actually, the chances of us hitting the maximum draw down for the year are very low. The size of all trades you make should almost seem painless to your future. If you are concerned about the size of a trade then it is too big for you and you should use a lower amount forthwith. Remember that longevity is the key to the making money by trading in any trading market. Trading slowly and steadily over a long period with minimal risk is better than the trading rapidly with too much risk.
If you are remotely involved in forex then check my blog Click Here
Article Source: http://EzineArticles.com/?expert=Anil_Kumar_Raju_Addipalli
No comments:
Post a Comment