# 2%

This may sound like a dumb question but if I started out with a \$3,000 account and I’m only supposed to risk 2% of my trading capital well 2% of 3,000 is 60 does that mean I only risk \$60 6 pips or 60pips &600?

It depends on the lot sizes you are trading. If you’re trading with 100k lots, risking 2% of your account on a 3,000 balance is 6 pips. Your stop loss on these trades would be 6 pips. With 50k, risking 2% of your account = 12 pip stop loss on a trade. Etc.

2% is \$60. or 6 pips trading a .1 lot size. Plus you need to allow pips/funds to pay for spread. You could maybe go 3%, but risking \$600 is 20% and will clean out your acct with a 5 loss streak.

It means you only risk \$60 per trade.

If you’re entering a trade with a 20 pip stoploss then you take \$60/20 and get \$3 dollars per pip.

If you’re trading a mini account where 1 pip = \$1 then you want to trade 3 lots on this trade. If you have a micro account where 1 pip = \$0.10 then you need to trade 30 lots.

If you do this calculation before every trade you will be 100% protected from blowing your account. At 2% per trade you’d need 90 losing trades in a row in order to lose just half of your money.

2% is \$60 of your \$3000 account - the pip amount can vary, ie you might only place \$1000 contract were pip is only worth 10cents then you can risk 600pips and only lose \$60 - or you might place a \$10,000 contract where pip value is worth \$1, so then you can risk loosing 60pips and only lose \$60 and then so on as the contract size gets bigger.
Personally i think the contract size shouldn’t be larger than 20:1 true leverage - which is 20 times your account size, ie 20*3000=\$60000 which would make the pips worth \$6 (for some this would be too high). so 10pips loss would result in \$60 loss - however i am willing to risk more than 2% per trade as my win ratio is higher than 80%.
Demo first and work it out for yourself - you would be silly not to - and it is one of the things you will need to know what works best for yourself - these ‘rules’ are to be defined by you.