26/09/2018
Volume also known as lot size.
This determines how many units of a currency you buy/sell in a particular position.
This has massive implications on the profitably and your losses.
0.01 = 1000 units
Profit or loss (P/L)= $0.10
If we have a 50 pip move .
Our profit /loss would be :
Number of pips x payout/loss based on volume = P/L
50 pips x $0.10 = $5 P/L
0.10 = 10000 units
P/L = $1
50 pips x $1 = $50
So on the same move you make 10x more using the volume of 0.10 than 0.01..also if the trade goes against you ,you will lose more .
🔴So the key is using a lot size that corresponds to your risk.
We recommend 1-2% risk on each position .
▪️Many accounts are blown because traders don’t understand how volume affects their trades.
🔸You can’t control price ,market direction and the news ..the only thing you can control is how much you risk on the market ..and your volume is the starting point of that .
👉🏽Trading is a journey ,not a destination .
Stop trying to skip a few steps .
🔹Preservation of Capital is 🔑
says :
Your trades should result in 4 outcomes :
▪️Small win
▪️Big win
▪️Break -even
▪️Small loss .
See ..a big loss is a result of taking on too much risk that your account can’t stand .
No one trade should ever make you or break you ✔️💯.
