How to manage risk using StopLoss function
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How to manage risk using StopLoss function
Hello Everyone
All "newbies" in the forex business could learn how to use the StopLoss function to control their risk as part of their "money management" program using a one cent per pip.
Those new to trading might ask where to set a StopLoss to avoid large losses, this can only be achieved by oneself depending on the strategy being used.
Example: (excluding swap etc)
More traders believe that a 1% or 2% risk of their capital on a single trade is acceptable.
So if you start with a $100 investment your maximum risk will be $1 (1%) or $2 (2%) on a signal trade. (Pip value = 100 pips)
If your order fails your next trade will be $9.90 (1%) or $19.60 (2%) on a signal trade (Pip value = 99 pips) and so on.
Placing a 2% or 4% TakeProfit (double win to loss risk) will ensure one win to two loss breakeven scenario.
10 losses in-a-row will only have a 10% or 20% drawdown depending on which risk percentage you choose.
Good luck
ilearn2t
All "newbies" in the forex business could learn how to use the StopLoss function to control their risk as part of their "money management" program using a one cent per pip.
Those new to trading might ask where to set a StopLoss to avoid large losses, this can only be achieved by oneself depending on the strategy being used.
Example: (excluding swap etc)
More traders believe that a 1% or 2% risk of their capital on a single trade is acceptable.
So if you start with a $100 investment your maximum risk will be $1 (1%) or $2 (2%) on a signal trade. (Pip value = 100 pips)
If your order fails your next trade will be $9.90 (1%) or $19.60 (2%) on a signal trade (Pip value = 99 pips) and so on.
Placing a 2% or 4% TakeProfit (double win to loss risk) will ensure one win to two loss breakeven scenario.
10 losses in-a-row will only have a 10% or 20% drawdown depending on which risk percentage you choose.
Good luck
ilearn2t
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