Ok so the indicator I am using tells me at what levels to set my SL at.
I have been told by various sources that my stop loss should be 2% of my portfolio margin.
How do I calculate the risk level I should trade at when looking at my SL level and margin %. Is there a calculation I can use?
Does it make sense what I trying to explain to you?
Thank you in advance :).
I use this handy Position Size Calculator: Position Size Calculator: Free Online Forex Position Sizing Calculator to help with risk management.
As for your understanding regarding 2% of portfolio margin, that’s the general consensus by many in this forum as a maximum risk limit. Plainly stated, you should not risk more than 2% of your account on any single trade. For instance, if you have a $5,000 account, don’t risk more than $100 (or 2% of $5,000) on a single trade. Keep in mind this is the maximum you should probably be risking. I personally average a .5% risk on my trades, and aim to increase this fractionally once I become more consistent and experienced with FX trading.
For a good explanation on calculating risk, take a look at this post: 301 Moved Permanently
Good luck.
Great!
Thank you very much!