Yesterday I opened a long GBP/USD position at @ $1.56723. I sold it shortly there after because I had a Natural Gas position open and between the 2 positions I was risking more than 3% of my account. I did not want to trade these positions aggressively, and so decided to close the GBP/USD position to keep within my trading parameters, and suffered a loss of less than 1 pip.
If both trades had failed (they didn't, Natural Gas realized a 12 pip profit) I would have lost more than my 1 to 3 percent risk tolerance recommended when trading conservatively. If I have more than one trade open at the same time I make sure that combined, I am not risking more than 1 to 3%.
One of the most important things about trading Forex is to keep the amount you risk low. If you are risking more than 10% of your account, then you will almost certainly lose your investment. If you are unable to keep the amount you risk between 3 and 5 percent on a regular basis, then I respectfully suggest that you put your money down at the roulette table rather than with Forex. You may be more interested in the hobby of gambling rather than in the investment opportunities Forex can offer. Just a thought. You will make losing trades. It's a fact. Don't lose your shirt over it, though, ok? When I place a trade that doesn't pan out I don't stress about it because I use sound trading strategies and only risk between 1 and 3% of my account balance, or between 3% and 5% for aggressive trades. Whether you trade conservatively or aggressively is up to you and may be based on a number of factors. Just be sure you understand the higher risks involved in trading aggressively.
Disclaimer:
Information posted on this site (BDI: Forex Insider) should not be considered investment advice. This is an informational website only. The owner of this website is not a registered investment advisor. Under no circumstances should any content from this website or it's affiliates (including articles, videos, or seminars), be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must, in all cases, be made by the reader or by his or her registered investment advisor. This material is for record keeping purposes only, and is intended for my own personal use.
