Just don’t listen to other people arguments against forex trading believe me you will get mad without having any conclusion)Every successful forex trader has its own trading style and discipline that,s what makes him successful,so choose what you feel comfortable with.Always choose ECN dont trade with the money maker broker because money makers trade against you.All the best)
I know the 20% sound reckless… But it is a fact, and ofcourse it is in line with the system used. I just think it is silly that I had my reservations in telling that because of the bias on the forum. Aren’t we too critical on ourselves? I am just trying to change the paradigm a little bit…
You might want to recalculate that, IdeFX … it’s all wrong, both parts. 
P.
Well, teach us… Just saying it is not very constructive…
But what I already notice is that 2% of 200K is not $1K, but 4K… So you are correct about that…
Yep, and in addition, position size is calculated as a relation of account balance (or equity, depending on one’s method) and stop-loss. Leverage doesn’t enter the calculation.
One can read all about that in the Babypips school, so there’s no need to repeat it all here.
Cheers,
P.
There are no secrets to success. It is the result of preparation, hard work, and learning from failure.
(Colin Powell)
My numbers were off too. I meant to say if I have 200k in my account and I’m trading 2M (leveraged 50:1-- I believe) would I be utilizing 1% or 10%.
Leverage still doesn’t have anything to do with risk calculation.
You calculate risk using account balance/equity and stop-loss size.
This means that if you trade 20 lots with a 200k account (which is not a good idea, by the way), your risk can either be 1%, or 5%, or 10 or whatever per cent … depending on how many pips you have set your stop-loss at.
Leverage has absolutely nothing to do with it.
Cheers,
P.
P.S.: One should never decide on a position size and then fit the stop-loss according to the 2% maximum risk one wants to take, as this might lead to being stopped out frequently.
Stop-loss must be decided on, and position size calculated in accordance with it.
Hahaha… I will go back to school again… I understand what you are saying, I was calculating from the max 2% loss and taken that as the account balance… My bad… 
Thanks for the the information. I was way off! I thought it more had to do with “usable margin” in proportion to one’s balance in a account. So if I don’t set stops, this hypothetical question would not pertain to me?
If you don’t set a stop for a trade, technically it means that you are risking 100% of your account.
Of course you’ll have a mental stop, but …
… your connection can break down, your house can catch fire, your mom can get sick, et cetera. Anything can happen to divert your attention from a trade.
Admittedly stop-loss for a trade will be the last thing on your mind while you worry how the hell to get out of a burning house without being flash-fried, but once you’ve saved yourself, you surely don’t want to find out that your trading account has been wiped out together with your apartment. 
Many traders, new and not-so-new, sometimes get confused with this whole risk/margin/leverage/positionsize/accountbalance issue.
If you’ve managed to confuse yourself (and from earlier posts in this forum it is obvious that both IdeFX and you know how to go about it and just had a temporary blackout), have a look at the School of Pipsology again.
The first four chapters of the Undergraduate / Senior Year section deal with money management, leverage et cetera nicely.
Cheers,
P.
There are no secrets to success. It is the result of preparation, hard work, and learning from failure.
(Colin Powell)
Thanks for the info. Will definitely brush up on my skillz. I hear what you are saying about stop-loss and I must say I think the brokers are some how in on making those stop-losses occur more often then they should. My stop losses are my limits on the other side of the trade… But that is a whole separate topic. You guys are great on this site thank you again!
its all about RISK … decision making … :22:
We live our life taking risk all the time and sometimes we don’t even know it. For example, getting married, having kids, new business, new job (s), buying a house, etc. It is called a risk because none of us can see into the future. We will never know what the outcome would be if we don’t take that risk.
Trading is the same thing. More often than not, when we place an new order (s), we don’t know what the outcome will be on that trade. For some people like me, 2% is the maximum risk that I can tolerate where I can still sleep at night without me worrying about my trade and not being paranoid about it to the point where I need to check my open trade every 5 min. or so. If you can risk 20% per trade and you are comfortable about it, good for you. I guess, you have a higher tolerance than most of us.
I don’t think there is right or wrong about risking more than 2% and beyond. As long as a person can manage it emotionally and he/she is a profitable trader. I think it is very crucial for a new trader to only risk no more than 2% specially if a person doesn’t have any clue what trading is and no technical/fundamental background. You don’t want to discourage a new trader right away because he/she blow up the account on a first trade due to taking a higher risk and wonder what just happen. However, I could see taking more than 2% if a trader has a decade of experience and very successful in this field…
Just my thought…