Reader Comments

Print Profit

by isbella isla (2019-03-02)

Whenever you get someone talking about Print Profit Forex trading money management, you'll hear the 2% rule being thrown about. If you're not familiar with the 2% rule, it dictates that you should risk no more than 2% of your trading capital per trade. Have you ever asked yourself why it's 2% and not say, 5% or 10%? And what exactly does risk per trade mean? First of all, you should know that the 2% rule is designed to maximize your profits while minimizing your risk in the long run. If you were to risk say 10% or even 5%, you would find it hard to recover your losses after a few losing trades. For example, if you were to lose 20% of your account, you would need to have a 25% gain just to break even. And worse, if you lost 50% of your account, then you would have to make a whopping 100% gain to get back to square one. That's why risking too much on any given trade is dangerous for your long term profitability. What about risking 1%? Would that be safer? Surprisingly, the answer is no. If you risk too little on each trade, you end up crippling your account growth severely in the long run. Risking too little is just as bad as risking too much when it comes to maximizing your trading profits. As you can see, Forex trading money management is like walking a tightrope... you need to get the right balance to stay on course. What most people don't realize is that the optimal risk per trade is not actually 2% for every system. It really varies based on the risk profile of the trading system you're running. 2% is considered as very conservative for most systems, and for some systems it's just as bad as risking 1% because it's too low. If you want to be on the safe side, you should aim for a risk per trade of between 2-4%, 2% being the most conservative setting and 4% being the most aggressive. The difference between 2-4% can be double or even triple your trading profits for the year!