How much of a role should you play?
The simple one is this. You must choose your position size based on the risk management guidelines in your forex trading plan.
You can determine your maximum risk by doing this.
What are your acceptable levels of risk per trade?
1%?
2%?
5%?
10%?!
20%?!!!!
Or are you going to stake everything?
REMEMBER! Not a gambler, but a trader is what you want to be!
You probably don’t even own a farm unless you’re a true farmer.
Position sizing is crucial for keeping your account in good shape and prepared for the next opportunity.
It is crucial to pay attention to how much or little you are trading.
You can determine whether you feel comfortable trading huge position sizes by tracking the size of your positions in your notebook.
You might also use wider stops and smaller lot sizes if you want.
Trade Management Rules
Before you ever contemplate entering the trade, you must have a strategy in place.
That strategy outlines how you will handle this trade, whether it works out well for you or not.
Entering a trade is simple; whether you make money or not will depend on how you exit the trade.
Example
Tom and Jerry, two traders, could place the same trade yet end up with completely different results.
Tom will profit from the deal since he carefully handled it and prepared an exit strategy for several outcomes.
Even if he loses, he’ll know when to halt the bleeding so that he can go with a less significant loss.
Jerry, on the other hand, is without a strategy. He is unsure of what he will do if the price rapidly moves against him and eventually wipes out his account.
Prior to entering the deal, it is crucial to plan how you will manage it. In the midst of a conflict, you DO NOT want to be making important decisions.
You should have made your mind up on how you would respond to every scenario before you make a deal.
When in a trade, you should behave like an emotionless, emotionless execution robot.
Though lacking Spock’s human side, you aspire to be like him. You desire to work as a Vulcan trader.
Prior to a trade, all decisions are taken. You take initiative. This indicates that you are not yet a trader.
You merely refer to what you wrote here before considering whether to enter a deal. This does away with any impromptu decision-making.
If you decide to enter the trade, you already know where your initial stop loss will be set, as well as your profit target(s), if you’ll trail your stop, and potential exit points.
