UweMoench posted: Most amateur traders jump to open big lot size as it brings immense profit. But a big lot size can transform into a bad dream. You can get a margin call. Don't risk more than 2% of your capital.
It is essential to follow proper risk management in order to set or increase lot size.
Every trader should work according to plan and discipline. At the same time, it is very important to follow money management. If a trader does not follow money management, he will never be able to make a consistent profit.
Yes, risking more than 2%of your trade or capital can turn out to be a bigger mistake than most people realise it at the time. It is important to focus on your risk management and 2% is the safest you can be.
I usually don’t risk a lot so I’ll have to agree that 1% is the best if you want to risk. Going beyond that can be troublesome, at least for me. I believe in keeping my trades simple and focusing more on my money and risk management. So far this has been working for me and I’ve started using low commission brokers too (XM and TurnkeyForex).
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