Forex Risk Management
The 1% Rule
Never risk more than 1–2% of your total account on a single trade. On a $1,000 account: max risk per trade = $10–$20. Even 10 consecutive losses only costs 10–20%. The math: 10% loss needs 11% gain to recover. 50% loss needs 100% gain to recover. Protect the account.
Position Sizing Formula
Position size = (Account size × Risk %) ÷ (Stop loss in pips × Pip value). Example: $10,000 account, 1% risk = $100 risk. Stop = 50 pips on EUR/USD. Pip value = $10/lot. Size = $100 ÷ (50 × $10) = 0.2 lots. Calculate this before every trade.
Stop Loss — Non-Negotiable
Every trade needs a stop loss before entry. Place below support for longs, above resistance for shorts. Never widen a stop to avoid a loss. Moving stop to breakeven after the trade moves in your favor is fine.
Open Exness Account
Regulated broker, unlimited leverage, instant withdrawals. Available in 170+ countries.
Open Exness Account Free →Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.