position size forex trading meaning

In this article we want to talk about one of the most important and effective success factors in Forex called position size or lot size. In order to grow in Forex and make successful trades, every trader needs to choose the right lot size before opening his positions. Lot size or position size should be chosen according to the amount of risk and capital and money management. In the rest of the article we will talk about the importance of this topic.

What is the position size?

Position size is the amount of your trade volume, or in other words your lot size, which allows you to choose how much of your capital and money to put into the position you want to open. The more money and capital you put into your trade, the more profit you will make if your trade is successful, but the more you will lose if your trade is unsuccessful.

Position size is one of the most important lessons you should learn in money and capital management so that you can always preserve and grow your capital by choosing the right lot size.

In the previous articles, we talked about the types of lot sizes in Forex, if you are an amateur trader and have just entered the Forex market, you should not open trades and positions with large lot sizes, because you may lose your capital, because emotionally and psychologically, you are not ready to open a trade with a large lot size or high volume, and you cannot control your emotions.

When can we use large position size?

If you have experience in the Forex market and are not an amateur trader, you can use larger lot sizes than amateur traders if you have learned risk management and capital management and can control your emotions while trading. However, we recommend that you use a large lot size if you are confident in your analysis and your strategy has a very high win rate.

How do we calculate the volume of trade according to the amount of risk and our capital ?

Every trader, based on their strategy and risk management rules, can risk a specific amount per trade. To calculate this risk amount for each trade, you can use the Myfxbook website and its risk management tools to determine the most suitable and optimal position size according to the risk you want to take on each trade.

The standard and most suitable risk per trade is between 1% and 2%. By considering this risk amount for each trade, you can set the most appropriate and optimal position size for your trades.

We hope you enjoyed this article.