There are 2 very important things when you will hold the position for a very long time, then you must understand two things, namely:
- Risk management
- Level close position.
I will try to describe some of my mistakes when starting forex trading. Perhaps after reading this, you will be increasingly understand how importance because if has entered into this situation then this experience will be important, you will soon experience it.
When I started the transaction and learn, there comes a time when I am so sure that trade will generate profits as confidence is high going to obscure the sense of risk on forex trading.
Now, with power without a moment of loss will continue to increase to exceed comfort levels and ended up making a big loss! Stop loss is hit with large losses.
Right now I am struggling to re-create an account forex trading because just suffered huge losses.
How the risk per trade?
First decide how much you feel comfortable to take the risk of loss on each trade that you do. You need to specify, how many% (percentage) the risk per trade.
Let's make some calculations, if you have the risk of only 2% of your account on each trade, each 50 consecutive transactions defeat will remove funds on the trading account $ 10,000.
If you have the risk of 5%, then the funds on the trading account will be depleted by a whopping 20 times in a row. If the risk of 10% on each individual trade then you need only 10 times in a row suffered a losing trade.
Can you see the pattern here? the more you have high risk per trade on each.
If you have funds in your account $ 5,000 then with 2% risk per trade, this means the same as the $ 100 risk per trade. With the risk of 5%, You risk the $ 250 per trade.
With the risk of 10% then the risk per trade is $ 500.
Personally I traded with risk from anywhere between 1% to 5%. With meresikosikan 5% per transaction for me it is very detrimental.
Remember, the more you risk, the more quickly your forex trading account funds will be lost.
Here's what I do:
I have a risk of daily trade between 1% to 5%.
If I lose 5% on this day, then I would stop trading.
When I trade on the day tomorrow, I will be dealing with the risk trade is 1% or 2% per day.
I would trade with little risk to the original account.
Why is 2% for risk management? I have bought and read and books about risk management for forex trading and many of the books it says that we should take the risk of 2% per trade.
Close position strategy
Before you open a position, you must have a plan how to close position.
You'll close position when:
Stop loss hit
Take profit targets because the profits taxable
Trailing stop loss hit
Close a position when the loss was too much.
Close position when viewing an entry signal trade contrary to the open position.
Some traders have ata system ustrategi close position
So, it is important for us to know both of the above so we can use it on forex transactions daily.
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