Opening big lot

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.

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% amounts for a huge loss. Sometimes, it works for some traders but only at the cost of risking their trade.

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.

personally i am not in the favor to open big lots as i believe it leads to slippage which can actually disturb the plans or the targets

I agree with you. It is better to avoid getting a margin call and not risk so high. Keeping it to 1 or 2% is safe and sound in my opinion.

Gracewilson1995 posted:
personally i am not in the favor to open big lots as i believe it leads to slippage which can actually disturb the plans or the targets

Exactly how i am feeling about big lots, but setting the margin call will make it quite good but I can see how slippage can get worse

As long as you keep your risk to 2%, this is fine

robindude posted:
As long as you keep your risk to 2%, this is fine

New traders should not take more than 5% risk per trade.

epeeminna posted:
I agree with you. It is better to avoid getting a margin call and not risk so high. Keeping it to 1 or 2% is safe and sound in my opinion.

I think that is quite low. The possibility of profits goes down if you risk that low, in my opinion. What do others say about this?

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).

Tyronemings654 posted:

epeeminna posted:
I agree with you. It is better to avoid getting a margin call and not risk so high. Keeping it to 1 or 2% is safe and sound in my opinion.

I think that is quite low. The possibility of profits goes down if you risk that low, in my opinion. What do others say about this?

I don’t think it works like that. If you are risking say about 5% of your entire trade and you happen to get a margin call from your broker, you are likely to lose more than gain from it.