Forex Risk Management – How to calculate the correct lot size in forex trading
Forex Risk Management
As mention in the part 1 series of Forex Risk Management.
Proper risk calculation per trade is extremely vital if you want to make forex trading a CONSISTENT success.
Note that I mention CONSISTENT.
It is because like I always mention, most forex traders can make lots of money in a day, week, or month. But to eventually lose it all.
One of the reason lies in proper money management.
And a proper money management in forex consists of risk management and risk % per trade.
If you do see lots of fictitious claims around the forex education industry where they claim a trader can make $xx,xxx with just $1,000 within weeks.
That is plain hype and all professional forex traders will know that it is not feasible.
Look if they are able to make so much money with just a capital of $1000 within weeks.
Forex Risk Management – How much risk per trade do you think they are risking?
They would have to risk MORE than 50% per trade or even 100% per trade in order to achieve such a feat.
And to achieve such a feat.
They must have a 100% winning record.
Even warren buffet doesn’t have a 100% winning record. LOL.
Therefore such claims are just to bluff and con the public into believing forex trading is so DAMN EASY to make fast and big money.
And when people have such expectations when they start trading, 95% of the time, they will lose it all.
Because the expectation is set WAY TOO HIGH in the first place.
Which in turn has subconsciously affected their risk appetite and greed level.
When that happens, there’s no turning back.
This is precisely why you will need to have a right forex mentor or coach when you start to dip your toes into forex trading.
Forex Risk Management – How to calculate the correct lot size in forex trading
Forex Risk Management
And you will need to know how to calculate the right risk % per trade.
As mentioned in part 1 of the series of forex risk management.
The safe risk percentage per trade is from 1% – 3%.
And in this part 2 series.
I will teach you how to calculate the correct lot size to trade based on the risk percentage per trade that you have decided.
Forex Risk Management – How to calculate the correct lot size in forex trading
Forex Risk Management
One way is to use the following tool:
Forex Position Size Calculator
As seen in the screenshot above.
Account currency: – Set it as to your capital currency held in your broker.
Account Size: – It is your balance capital in your account
Risk Ratio %: – It is your risk percentage per trade. Set it from 1% to 3% (based on your own personality)
Stop loss pips: – You have to calculate the number of pips for the pair you are entering. By measuring the entry point to the stop loss point which you will set.
Currency pair: – The pair which you are going to trade
After all is set. Click on “CALCULATE”
And at the bottom,
it will show you the lot size to trade.
So the above is a way to calculate the correct lot size per trade.
This is the way to go if you want to make forex trading a success.
As a forex trader myself, I do understand that the above process will take quite some minutes.
In the next part – Part 3 of the series of Forex Risk Management.
I will show you the fastest way to do the above calculation.
Within split seconds, you will be able to get the lot size you want.
See you on the next series of Forex Risk Management.
Check out our online forex trading AFM winning Forex Price Action Forex Trading Course where I teach you the exact FULL Forex Trading Strategies | system that I personally use to be consistently profitable.
See you on the other side my friend,
Asia Forex Mentor
Ezekiel Chew
Asia #1 Forex Mentor
www.lifeofatrader.com
Next Expert Article: Risk management part 3 (professional forex tool)
