Fri, July 19, 2024

Do you know how much to risk in Forex?

stock trade, Wall street, Do you know how much to risk in FOREX?

Sometimes the simplest things can be (for some) the most difficult to accept and understand. Many people have no idea how to manage even a demo account. This article is for them.

When they get into trading, many people start playing with their demo account doing meaningless operations, and even worse, they think they are gambling. 

Many open demo accounts of $100,000 or $500,000 to “practice.” There is nothing wrong with practicing. However, the novice trader starts with significant operations, and that is where the great fallacy begins. This beginner will end up risking more than necessary. The grand finale is that one way or another, the trader will end up making this a habit and will repeat the same bad habits when operating a real account. Many of the massive losses are mainly due because they repeat bad habits from the time they operated with the demos. 

The first thing a trader must learn is to survive and then be a constant and consistent winner. 

When you start trading forex, the first thing you should do is learn to respect the market and not let it strike you down. A trader cannot risk more than 2% of the total amount of his account. Be careful with your account; be it a standard, mini, or micro account. Regardless of the amount, the maximum risk capital should not exceed 2%. Only then can you recover if you have a terrible losing streak. And believe me, it even happens to the best traders in the world, and it could happen to you at any time. Losing is part of this business, and you have to learn to live with it.

However, if someone loses 30 times, then the best thing they can do is review their strategy or study from the base to correct his mistakes. That’s what capital management is all about.


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