You have to determine what you want from the market and what you are willing to risk to achieve it.
First of all, you have to determine the risk you are willing to take in a trade. Whether it will be 0.5% or 2% is entirely your decision, but it’s important to stick to it to improve your ability to think while you are at risk. I personally advise you to use no more than a 2% risk in а trade.
Once you have determined the risk in percentages, it is time to choose how many maximum pips will be your protective stop. As you noticed, I said maximum, so you can always use a smaller, but never bigger one. The maximum stop must correspond to the percent risk you have decided to use. For example – I prefer to use 1% risk with 15 pips stop. If I have the sum of $ 10,000, then 1% of this is $100. On average, I can lose $6.60 per pip, which means I will use 0.66 volume to each trade I open at the market.
Thirdly, you need to determine what profit you want to achieve each month. I personally chose 20%, and I also think that the goal of more than 30% per month would lead to great and unnecessary stress. Having risked 15 pips with 1% of my account balance means that to achieve 20% I have to make 300 pips profit.
You can download the excel file for placing your goals from our website as well as an opportunity to view our tutorial video explaining how to use it.
You already know what risk you will take and what your monthly goal is. You also know what volume you need to use in each of your trades.
This was the first piece advice out of ten, with the help of which, will enable you to improve your trading.