how much is the risk in Forex trading?
Many people say you should set a stop-loss for each trade, and that the maximum loss you should accept if your stop-loss is hit is 2%. some people say 1%.
Its a good rule but knowing this on its own ignores some important issues -
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Where is your stop-loss?
The closer your stop-loss is to your entry, the more likely it will be hit. Set the stop-loss at a price level identified by the TA, which will mean your trade is very unlikely to make a profit if this level is hit. Remember to take account of the volatility of this market -
How strong is your strategy?
You should have trialled your strategy so that you know this trade is more likely to be a winner than a loser. Or that this sort of trade is eventually likely to be a very big winner, even if that is not the most common result.
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