In today’s forex faq, I will be going through a question from our fellow traders about the risk amount.
Below is the question
If I use about 40% of my money as a stop and consistently wins 4 trades from 6,is it this a bad strategy, Instead of using only 20%?
I am happy to hear that you are having 4 winning trades from every 6 trades you made. I must say that you are having a good trading strategy on hand.
However I feel uncomfortable about the amount of risk you are exposed to in every trade. Risking 40% of your money per trade is far too high, you just need 3 consecutive losses to wipe you out.
In fact, using 20% per trade is also too high, my personal risk amount is only 2 to 3% per trade. This is to ensure that I am able to continue trading when I met a losing streaks.
To be a successful trader, risk management is very important and can be the key to your success.
Below is another question from another trader.
Being relatively new to Forex I am completely immersed in trying to perfect my routines. Not just of physical trading but also in the way I handle my accounts and how I view them!
My question is, with 6 or 7 demo accounts running and one live account so far what is the best way to handle this efficiently?
I must say that you must be pretty busy as you have to run 6 demo and 1 live account. In fact, you just need 1 demo account and you will be able to perfect your trading skill.
Sometime more is less and this can’t be more true in trading. In trading, you have to maintain your focus a lot and switching from one account to another can be quite a chore at time.
Personally I will suggest that you have 1 demo for fine tuning of strategy and 1 live to trade.
If you have any suggestion to give to our fellow trader, do feel free to give your comment below.