I don’t understand yet what percent of my account balance I should invest. With equities there really isn’t a problem investing 100%, or more with margin, of my account balance.
Suppose I have $1000 in my Forex account and will only be investing in the EUD/USD pair. What is the maximum percent of my balance I should typically invest in the pair at 50x leverage? Does the rest of my money just sit in the account as cash?
Generally between 1 - 2% of your account balance should be risked per trade
& not more than 5% on open trades.
The idea of 1% is that you would theoretically have 100 losing trade before
losing your account.
So 1% of $1000 = $10/trade
First calculate your stop loss, for ease of calculation 100 pips
Therefore 10/100 = 10 cents /pip
For more math see the school site below.
The Importance of Correct Position Sizes | Position Sizing | Senior Year | Undergraduate
Yep, I agree with daydreamer65. 1-2% risk per trade is generally a good risk management practice and coming up with a limit on your total risk for a day if you trade multiple positions is also recommended. The reason is that price action is generally more volatile in forex compared to equities and your trades could get triggered/stopped out/won in a span of a few hours. Aside from that, you should be able to calculate the potential losses in advance so you can make necessary adjustments and prepare yourself psychologically as well. Proper risk management is key in making sure that you are able to stay positive in the long run, even if you incur a few losses here and there.
there you have it, for starters its really best to risk (per trader) 1-2% so for a 1000 dollar account the max lose per trade should only be about 20 dollars thats 2% limit your max risk to 5% but never go over 
Ok so to make the numbers extremely simple let’s start with an account balance of $100 at 50x leverage trading EUR/USD.
Is this accurate?
Risking 2% of the balance means risking $2. At 50x leverage that equals 100 units. So a 100 pip move in the right direction equals a $1 increase in account value or a 1% increase in account value.
It really comes down to what you feel comfortable with, but you did get the figures which most traders use. It also depends on how good your strategy is and how comfortable you feel with it. Leverage does not matter, risk management does. Let’s say you do pick 2% of $1,000 which equals $20. Regardless of what leverage you decide to trade with, you should stick to percentage you feel comfortable with.
You should know it isn’t about leverage. People usually risk 1%-2% percent of their money per trade. So if you ask someone something like “[B]What is the maximum percent of my balance I should typically invest in the pair at 50x leverage?[/B]” First, you should calculate how much pips you will lost if it’s hit your stop loss. Then you should calculate how much money you can risk based on (1%-2%). After this, you will get how much lot you need to buy.
If you risk 2% with 50x leverage, you will still have more than 80%(I don’t know how much exactly, too lazy to count) of your equity. You can try another pair to trade (please make sure that it has no correlation to your other open positions) if you like, but if you only trade one pair, yes you do NOTHING with the rest of your money.
Don’t try to increase your risk because you still have a lot of equity left or you will go bankrupt quickly.
Correct.
As most have stated once leverage/margin is learnt it is then quickly ignored.
The reason being is that the value per pip is the factor which traders concentrate
on the most.
With a $100 account you would be looking to trade at between 1 to 10 cent/pip.
$2/per trade @ 10 cent/pip = 20 pip stop loss.