Position sizing is arguably the most important aspect of risk management. No matter how good your analysis is, risking too much on a single trade can wipe out weeks of profits.
The Fixed Percentage Method
The most common approach is to risk a fixed percentage of your account (typically 1-2%) on each trade. For example, with a $10,000 account and 2% risk, your maximum loss per trade is $200.
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4TRD Team
The 4TRD editorial team covers forex markets, trading education, and broker analysis.