Calculating the lot size to use in a trade
I.e If you are risking only 2% of your acc per trade, here is how you’ll determine the lot size to use. Using an acc size of 1000usd ,2% of the acc is 20usd . If the market structure gives you a setup with a 40 pips SL, Calculate the lot size that will equate a movement of 40 pips to 20usd, thats 0.05.
Lets say you are risking 5% per trade, with the above example, 5% of the acc will be 50usd, what lot size will be needed to equate 40 pips to 50usd, that will be 0.12
We advice traders to risk only 1-3% of their acc per trade.