The rule of 2% is a powerful tool in Forex trading. With the adoption of this rule is that a strategy that reduces the size of their losses during the fighting, using an important consideration. However, it is a little warning that you should consider making estimated the rule of 2%, the number of shares of the money currently. As you know, determines the number of shares you can buy a maximum loss and the size of the stop. This means that the increased risk of the dollar value of the open position. Simply reducing the size of your stop, the establishment of a tight stop-loss can increase the value of the open position.
To avoid a situation where you can find positions in large fleet of Forex compromise may decide to introduce an additional rule. This rule limits the monetary value of a position that is more than a certain percentage of its replacement surgery of the entire fleet.
For example, you can decide that "I will never open a position that has a value of more than 25% of the full floating exchange transactions. Not in this rule, if the job is by calculating the formula, the number of permanent shares be with the dollar value of this post more than 25% of their fleet would. If that happens, you lose the position to ensure that not more than 25%.
The percentage determined to be dependent on the type of system, the "liberalization of trade, the fleet size and risk readiness. In general, the operations of the floating exchange rate less able, 25% and fleet of change 10% or 5% use used be. There are no definitive numbers, and the percentage that you choose depends on your personal situation.
Once this trend has been fixed, you have all the rules of money management available, willing to take risks in the foreign exchange market to master. Now you need to take the next step. Test your system to determine which variables that are right for you to remember, always remember that the size of the position of the most important part of any system design. It is the heart of dealing with money. Once you have tested the system and refining the rules, you will be well on your way to successful Forex trading.
To avoid a situation where you can find positions in large fleet of Forex compromise may decide to introduce an additional rule. This rule limits the monetary value of a position that is more than a certain percentage of its replacement surgery of the entire fleet.
For example, you can decide that "I will never open a position that has a value of more than 25% of the full floating exchange transactions. Not in this rule, if the job is by calculating the formula, the number of permanent shares be with the dollar value of this post more than 25% of their fleet would. If that happens, you lose the position to ensure that not more than 25%.
The percentage determined to be dependent on the type of system, the "liberalization of trade, the fleet size and risk readiness. In general, the operations of the floating exchange rate less able, 25% and fleet of change 10% or 5% use used be. There are no definitive numbers, and the percentage that you choose depends on your personal situation.
Once this trend has been fixed, you have all the rules of money management available, willing to take risks in the foreign exchange market to master. Now you need to take the next step. Test your system to determine which variables that are right for you to remember, always remember that the size of the position of the most important part of any system design. It is the heart of dealing with money. Once you have tested the system and refining the rules, you will be well on your way to successful Forex trading.
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nice.........thats very helpful.thanks sandeep
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