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Position Sizing at Forex
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Posted On :
Apr-07-2010
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Article Word Count :
379
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Those who are new to this forex trading platform for them it is very difficult to resist from being engulfed by the attractiveness of the earning maximum profits in the market.
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Those who are new to this forex trading platform for them it is very difficult to resist from being engulfed by the attractiveness of the earning maximum profits in the market. Even though all the traders are aware of the fact that forex is a risky zone where market is full of frequent up and downs thy used to do common mistakes and then pay huge fine as a compensation for that mistake.
Caution and attention are the keys to come over the hovering ship of the forex currency pair exchange deals and to make position at the market intelligently without occurrence of any big issues.
The formula that can be used to determine the position size to imprint your presence in the market is as follows:
X = R x B/ T x (P1- P2)
Where
X = position size in units of base currency
R = percentage of account trader wish to put on risk
B = Account Balance
T = short and long indicator, -1 in case short position and +1 in case of long position
P1 = Entry Price
P2 = Exit price or stop loss price level
This will help the traders or investors to take active participate in the forex trading platform with the accurate calculation of the exact position size.
Any kind of trading set up no matter it is best in acknowledging trade activities with perfection but still thee are possibilities that any thing can go against your trade position and your winning move can turn up into loss.
Certain degree of randomness or risk always exist in the forex trading platform it is not a big issue to panic but of course precautions should be taken avoid huge amount of losses by implementing good trading practice with preciseness in your trade moves.
When something can not be avoided then we should try to manage such inevitable incidences or occurrence. This is just a part of forex and all the traders should learn to bear the losses if they want to succeed.
Determining the position size would be helpful but important is building your trading psychology to cope with any kind of trading troubles.
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Article Source :
http://www.articleseen.com/Article_Position Sizing at Forex_15729.aspx
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Author Resource :
I am Linda Green and have keen interest in financial investments and matters related to Forex trade.
The site gives relevant information on currency trading and provides regular updates of the changes in currency pairs like USD/EUR through Learn Forex.
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Keywords :
Forex, Forex trading,
Category :
Finance
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Currency Trading
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