management method is applied to reduce losses. Almost all successful trading strategies include a disciplined procedure for cutting losses. Maintaining a smaller lot size will help you to trade in a flexible manner and assist you to manage your trades with reason instead of acting out of emotions.
Forex risk management lot size
Ironically, this is one of the most overlooked areas in trading. Use Correct Lot Sizes. For instance, if you go short on EUR/USD and long on USD/CHF, youll be exposing yourself to double amounts of the USD and in the equivalent direction. Work out the 2 of 5000. So, it is wise to avoid taking positions in correlated pairs. Many people forget about this rule and invest the money that they need for their crucial day to day needs into the forex market.