How to set up a Forex trading position? I set up my positions on the premise that I would never lose more than 1% on any trade. If I have $100,000 in my account , I can’t lose more than $1,000 on a trade. To know your stop loss level, first imagine the level you are comfortable with if the trade loses, and then set your position size accordingly.
If the trade’s entry price is $105 and the stop price is $100, then you can trade 200 shares before hitting the $100 stop price. $200*105 = $21,000, which is your 200-share trade position, which is about 20% of your total trading capital, with a potential stop loss of 5%, which means 1% of your total trading capital.
- A position of 20% of the total trading capital, plus a potential stop loss of 5%, which is 1% of the total capital.
- A position of 10% of the total capital, plus a potential stop loss of 10%, which is 1% of the total capital.
- A position of 5% of the total capital, plus a potential stop loss margin of 20%, which is 1% of the total capital.
The Average True Range (ATR) can give you an idea of ​​the daily price range and help set up positions based on your time frame and stock volatility. If your opening price is $105 and your stop loss price is $100, then the ATR is $1, and the 5-day swing time can be used for stop loss.
Position your position from your own stop loss level and market volatility. The space requirement for your stop loss determines the size of your position setup.
Assuming you only risk a 1% loss when you fail a trade, each trade is just one insignificant trade out of the next 100, and your emotions will be minimally disturbed. Even after a string of failures, you still have a chance of surviving and finding other opportunities for success.