Forex trading proper risk management
XAUUSD $500 Account Management Plan 1. The Math of Your Setup With a 38% win rate , you will lose roughly 6 out of every 10 trades. To be profitable, your "Reward" must significantly outweigh your "Risk." Risk per Trade: $18 (3.6% of $500 balance) Daily Max Risk: 6 trades x $18 = $108 (21.6% of account) Warning: Losing all 6 trades in one day would drop your account to $392. Required Risk-to-Reward (RR): To break even at a 38% win rate, you need a minimum RR of 1:1.65 . To actually grow, you should aim for 1:3 or higher . 2. Managing the 0.02 Lot Size On XAUUSD, a 0.01 lot size equals $0.10 per pip. Therefore, a 0.02 lot size equals $0.20 per pip . Stop Loss Calculation: $18 risk / $0.20 per pip = 90 Pips ($9.00 Gold Move) . Your Stop Loss (SL) must always be exactly 90 pips from your entry to maintain your $18 risk. 3. How to Capture "Big Profits" (The 1:5 Strategy) Since your win rate is low (38%), you cannot afford to take "small" profi...
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