Trading Psychology How to Avoid Risking Too Much I belie | 🎯Accurate FX Analysis

Trading Psychology

How to Avoid Risking Too Much

I believe that proper position sizing is THE single most important skill a trader should have. Yup, that’s right – it’s THAT critical!

But before we get down and dirty with the details of lot size or position sizing, let’s define it first.

Simply put, proper position sizing means setting the correct amount of units to buy or sell a currency pair. In other words, it involves finding the lot size that will keep you within your risk comfort level.

Proper position sizing is a key element in risk management. And as I’ve told many times, risk management can determine whether you live to trade another day or not. It can keep you from risking too much on a trade and blowing up your account.

Sure, when you bet big, you can win big. But what happens when you lose? You don’t need to be a brain surgeon to figure that one out – you lose big, too.

Without knowing how to size your positions properly, you may end up taking trades that are far too large for you. In such cases, you become highly vulnerable when the market moves even just a few pips against you. Here are a couple of tips to avoid risking too much: