Risk management in forex

There are some rules that you must know. I'm not saying you have to follow everything you read. There are no gold rule.

As most of experienced traders says you should allow to risk no more than 1-2% of your deposit on each trade.

It seems very logical but you won't make much profit that way at least in the beginning. To earn some money for living you had to invest several thousands of dollars.

There is always a temptation to make one big trade to make your account grow in several times even if you invest 1000$ . Try to resist this temptation. When you open such trade there will be 2 devils in your head.

First one called fear... Fear to lose money if your position goes negative. You will sit and watch hoping that trend reverse. Maybe it will reverse and this feeling would leave you or you could catch "margin call" meaning losing all your money at once.

Second devil called greed. When your position grow and you see lets say +100$ you won't close it and wait till it become bigger. You think you forecasted the trend and then it reverses and you still holding position, seeing how your profit goes back to zero. In that case you have to close your position with no exceptions.

I just want to say that emotions prevail your mind and you simply would take wrong decisions.
Some people think that this feelings helps them to trade. Personally I'm not that kind of person.

Smaller trades won't make you so nervous. My trading system gives me only 60% of profitable trades. Some experienced traders affirm that they can predict 70-80% of trades. I think this is possible. Especially with some kind of inside information. Even being on stock exchange you could see panic or euphoria in traders eyes. Unfortunately we all can't be there and feel that atmosphere.