Can you risk 5% per trade twice on a currency pair at the same time
What is the reasoning behind doing something like this? I mean you can do this of course… but why?
You can risk 50% per trade twice on a currency pair at the same time and the probability of losing your entire account is most likely just a little higher than 50%. You will not live to fight another day.
And that is the reason that most traders choose to risk between 1% and 2% on a trade. In order to live to fight another 50 days or more. In particular, if you are down 50% on your bank, and you still apply a rule of risking 1% of your current bank, in theory you last forever.
So before asking how much you can risk per trade (an indication of impatience and greed), ask yourself how long you wish to survive in Forex trading. Is this something you want to try for a day, like a trip to the bookies to put money on a horse) or something you prefer to stick at and master over a decade. The answer to that question should dictate whether you limit yourself to 5% x 2 or 1% x 2.
what you think guys there is any difference between money and risk management ? its all about same issue or any major difference between two.
Money management (the maximum risk per trade) is a subset of risk management. For example, another subset of risk management is how your strategy treats news. Do you decide to participate in the market at times of high impact news, or do you decide to exit the market during times (such as non-farm payroll announcements). My money management strategy is quite simple and short. My risk management strategy runs to more than 20 full pages.
for avoiding unfortunate risk and losses we the traders always take a approach which we call risk management, and its very similar with money management.