I want to share on the money management approach which i have been using for some time. In general, I will risk 0.5% to 1% of my account size. In any day, i will not risk more than 5% of my account. This is to prevent potential huge drawdown and to limit the trades you can take in a bad day.
In the past, without a 5% daily loss limit money management approach, i have experienced a drawdown of more than 10% in a day. Looking back at my trades, i realised i took on more bad trades whenever i started losing more. I became irrational and I was eager to make quick bucks to increase my equity.
The lesson is to stick to your money management at all times. Some people may risk 2%-3% per trade, which is still fine as long as it is a sound plan.
Happy trading!
In the past, without a 5% daily loss limit money management approach, i have experienced a drawdown of more than 10% in a day. Looking back at my trades, i realised i took on more bad trades whenever i started losing more. I became irrational and I was eager to make quick bucks to increase my equity.
The lesson is to stick to your money management at all times. Some people may risk 2%-3% per trade, which is still fine as long as it is a sound plan.
Happy trading!
The most important lesson in forex is money management. With good money management and an average strategy, you may be able to make a small profit in the long term. If you have a good money management with a good strategy, you will be able to see a decent equity return.