let’s say i have 100$ deposit on my account and i’m using 200:1 leverage.
for risk management and calculate 1% of my capital , i should calculate 1% of 100$ or 1% of (100*200)$ ?
1% of $100.
The aim of risk management is to calculate and limit the capital loss from your account for the trade that goes against you.
Was this all you wanted to know or is there something else we could discuss in this thread? I guess there are a lot a newbie should learn about position sizing.
Yes 1 % if 100%. It means in a single trade your maximum loss limit is 1$ if your capital is 100$ and risk percentage is 1%. If position size increases, total number of pips will be decreased.
That’s the correct one; by the way don’t open multiple trades position at a time.
Of course 1% from your deposit, it is 1 dollar. And it depends on your stop loss size and order volume to calculate your potential profit or losses. Which order size are you going to choose?
I think you need to risk 2-3% of the capital in a single trade as your account is micro and minimum lot size is 0.01. If you risk $1 with the minimum lot size than you need ro put the stop loss some 70-80 above or below the current bid price. Is it viable?
The beginner's guide to FX trading