In doing forex trading, actually we are given flexibility in determining the risks and rewards that we will bear or we receive. This value is not bound by anything in the sense that we are free of the maximum risk that we bear the responsibility and how much reward we can accept. But of course it should see the range of support and resistance that exists and the trading system we do, whether scalping, daily trading, or swing trading.
Trading system that we do greatly affect the value of risk and reward, this is because the trading system is related to the time range in our trading activities.
In applying the right money management system, of course we will see from the level of risk and reward that we can get from one open position we do. Risk and reward can be set or determine from the beginning by putting stop loss and profit target.
Back considering the money management system that has been discussed in other articles, that every open position that we do, should provide risk and reward opportunities at least 1: 1, if the value is smaller than that number then we should undo the intention to open positions and take Attitude to wait for a more appropriate moment.
Waiting for the right moment will feel wiser than entering the market with a level of risk far greater than the profit opportunities that we get. When a negative floating occurs with a much greater risk it will lead to unnecessary errors such as cut loss with the value of loss is far greater than the profit we have.
Actually the theory about money management is often we hear and learn through articles on the internet, but sometimes traders forget about it, so that when an error occurs in an open position then traders will actually do things that further aggravate the condition of trading by doing a series Open positions with lot sizes that do not match the size of the accounts owned. These conditions will certainly damage money management that has been prepared neatly before. The end result of this not measurable action will mostly end with a margin call.