How Using A Small Lot Size Can Preserve Your Account

[moonchild]

As a beginner in Forex trading, its is natural to be tempted to use Big Lots sizes, especially if you have been watching the gurus on social media flaunting their profits, most of the times these people are trading with them all accounts, you should not take them serious at all.

When you have a small account, use a small lot size, for example any account from $50 to $300 should use 0.01 lot size, the reason why small lot sizes are advisable for small accounts is, it allows you to have a very large stop loss so that even when the price retrace you would not be taken out of the market, but when you are using a big lot size you cannot use a large stop loss else you would blow your account.

Using a small lot size on your small account will also gives you more confidence because you know whatever happens you would only lose a small amount of your account instead of risking it all and losing everything.

It takes time and patience to build an account to a substantial amount so take your time and learn as you trade, tune out the noise, apply good risk management and you are good to go.

 

[Asahi]

You have to be self-motivated so any big loss can’t detract you. Work on signal making through market analysis. Without being sure about any market signals, traders shouldn’t take any entry. Initially you can hire a guide to seek advices from him but you have to bolster your ability ultimately. Eurotrader broker is secure and makes sure enough support for traders.

 

[Theanthropic]

Micro lots are best for getting market exposure & hands-on trading experience without risking a lot, brokers like fxview, xm and pepperstone are ideal for newbies to use as they have low min deposit and offer smaller lots for trading. There is always time to grow account size once one has established themselves as a successful trader in the market.

 

[Sotherefore]

Lot size is very important. You cannot be using a bigger lot size when your capital says otherwise. All these things are to be put into consideration to be able to carry out an effective trade with lower possibility of blowing off your account.

I have been practicing a demo trading for sometimes and I understand the risks involved in trading a huge financial market without knowing the type of losses in needs to use at a particular trade.

The higher the volatility of a currency pair the lower the losses that should be use . That is my own personal observation just as to prevent you from using a higher losses in a volatile pairs like gold and jpy.

You have to understand that no matter how accurate your analysis will be , without proper risk management the possibility of losing Even with high accuracy signal is still very high .