FX.co ★ Trader's Diary: EUR/USD on 01/21/2020, Money management

EUR/USD remains under pressure, pressed to the level of 1.1080.

There are still two ways left - or a break below 1.1070 and down.

Or turn up and go to 1.1175.

The final decision will come on Thursday during the ECB meeting which is still two days away.

About money management:

The main reason for FX traders losing money is the extremely high trading risks.

Most novice traders spend 99% of their attention on choosing a market entry point and not thinking about trading volumes.

It is extremely important not to overestimate the risks involved in trading, namely:

With a small account size of up to $ 1,000, the risk per transaction cannot exceed 5% of the account size.

With an average account size of up to 10-15 thousand dollars, the risk per transaction should not exceed 2% of the size of the account.

With a large account size of more than 15 thousand dollars, the risk should not exceed 1% of the account for the transaction.

You must calculate the risk yourself, based on the volume of the transaction and the amount of loss in points, if the price is against you. In this case, you first need to determine the amount of loss in points and then based on the allowable amount of loss in money (see above), determine the volume of the position in lots.