Forex »Trading »Career ({Bangla Forex School)}

Position sizing is the term given to the process of adjusting``` the number of lots you trade to meet your pre-determined risk amount and stop loss distance. That is a bit of a loaded sentence for the newbie’s.~~ So, let’s break it down piece by piece. This is how you calculate your** position size on every trade you make: “Bangla Forex School”First you need to decide how much money in dollars (or whatever your$$ national currency is) you are COMFORTABLE WITH LOSING on the trade setup.» This is not something you should take lightly. You need to genuinely be OK with losing on any ONE trade, because as we discussed in the previous section¡¡, you could indeed lose on ANY trade; you never know which trade will be ¥¥a winner and which will be a loser.

Find the most logical place to put your stop loss.

Bangla Forex School

 If you are trading a ϡϡpin bar setup this will usually be just above / below the high / low of the tail of the pin bar. Similarly, the other setups I teach generally have “ideal” places to put your stop loss. The basic idea is to place your stop loss¡¡ at a Bangla Forex School level that will nullify the setup if it gets hit, or on the other side of an obvious support or resistance area; this is logical stop placement. µµWhat you should NEVER DO, is place your stop too close to your entry at»» an arbitrary position just because you want to trade a higher lot size, this is GREED, and it will come back to bite you much harderϱϱ than you can possibly imagine.

Next, you need to enter the number of lots or mini-lots that €€will give you the $ risk you want with the stop loss distance you have decided is the most logical. One mini-lot is typically about $1 per pip, so if your pre-defined risk amount is $100 and your stop loss distance 50 pips, you will trade 2 mini-lots; $2 per pip x 50 pip stop loss = $100 risked.