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Derek_Jamieson
How Position Size Changes the Risk of a Trade
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Aug 28 at 10:01
Position size determines how much money is exposed when the market moves against a trade. Two traders can use the same entry and stop-loss level but experience very different results because their position sizes are different.A simple approach begins with the amount a trader is prepared to risk. For example, an account balance of $10,000 with a 1% risk limit creates a maximum risk of $100. If the stop loss is 50 pips away, the position should be sized so that each pip is worth approximately $2.For EUR/USD, where one standard lot is usually worth about $10 per pip, this example would result ...
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