How to Determine Forex Trading Volume
The writing about forex trading volume is still closely related to previous writings, especially regarding risk management and forex trading that uses margins and leverage. And why do we discuss it? because we want to reduce risk and avoid the term exposed to margin calls.
When we will open a trading position it is important to determine the amount (volume) of the contract before being executed by the trading platform.
And when determining the volume of a trading contract, we cannot do it over volume just to pursue profit, even though we have calculated the reward to risk ratio aspect carefully.
Why can’t we do this? because when we run a forex trading business there are not only profit terms but there are also terms of loss. And the name of the loss when running this business is not only a small part of the capital that runs out but all of our capital can be used up.
To reduce risk, we can control it by determining trading volume wisely. To be able to determine a good forex trading volume, we must understand a number of things as follows,
- What is the amount of Equity or Balance owned
- Currency pairs to be traded
- How much risk do you want to take (in percentage)
- Stop loss (in units of pips)
- Currency exchange conversion value
Why should we do this kind of thing? because we are a financial manager 🙂 who controls capital with full risk.