From what I know, trading big lot size with little capital is definitely very risky. It takes just a little drawdown to wipe out your forex trading account. But when you have a big trading capital, trading a big lot can get you good profits even with little price movements.
Use lot size in accordance with the equity in your account. Make sure that you keep margin calls in mind. When you trade a small lot size, you can use a cut loss strategy but with larger lots, you have the risk of a big loss.
While trading, focusing on risk management is quite essential otherwise you can make your account zero immediately. Somewhere, trading larger lots shows the greed of a trader. It might look attractive but bites in the end. Better be careful about the decisions you make.
If you have experience in trading micro and mini lots, you can use the standard lot. But 100 lots is a big number according to me. Try your system on the micro account first and see whether it is worth increasing your lot size or not.
As you have asked it here, you will get answers one way or the other. But it’s how it worked for others. I suggest first test different trade entry methods with a backtesting program and forward test your system in live market conditions. For both of these, use your demo account and not the real money account.
The choice of the right lot size depends on your success rate. Don’t skip things. If you have a success rate of 90% or more, bigger lots are an option. But if you are yet figuring out what works and what doesn’t, don’t waste your money on bigger lots. Go for smaller ones.
keatonrichard posted: The choice of the right lot size depends on your success rate. Don’t skip things. If you have a success rate of 90% or more, bigger lots are an option. But if you are yet figuring out what works and what doesn’t, don’t waste your money on bigger lots. Go for smaller ones.
True that! To add to it, I would also like to mention that irrespective of what position size you trade in, make sure that you have a safe stop loss associated with it.
I think fewer trades are better as every time you trade, your broker takes away a certain amount in either commission or spread or both. Also, consider your risk to reward ratio. You don’t have to trade more frequently if you trade small lots.
Sarjohn posted: If you are a new trader then You are taking a lot of risk, first try a demo if you feel that you won’t lose then go for live trading.
I have been doing pretty fine on demo.
If you are doing good on demo then you can certainly proceed to live trading but for being on a safer side I would say place trade with micro and mini lot size first.
Ya, but I want “real profits”.
If you are confident that you will gain a good amount of profits, then place a big lot size and try, but make sure that you invest that much capital which you are ready to lose as forex is a very unpredictable market.
ADVERTENCIA DE ALTO RIESGO: El comercio de divisas implica un alto nivel de riesgo que puede no ser adecuado para todos los inversores.
El efecto de apalancamiento crea un riesgo adicional y una exposición a las pérdidas. Antes de decidirse a operar con divisas, considere cuidadosamente sus objetivos de inversión, su nivel de experiencia y su tolerancia al riesgo.
Podría perder una parte o la totalidad de su inversión inicial. No invierta dinero que no puede permitirse perder. Infórmese sobre los riesgos asociados al trading de divisas y pida consejo a un asesor financiero o fiscal independiente si tiene alguna duda.
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