1. My Approach On Position Sizing
2. Risk Vs Position Sizing
3. Flash Trades
4. Radar Trades
5. Fundamental Trades
6. Other Data
MY APPROACH ON POSITION SIZING
Over the past week, I was asked a few questions
about my trading thoughts and my position
regarding the sizing of the trades that I place with
the PREMIUM SERVICE.
I promised that I would address this matter via this
week’s blog so below I supply my general thoughts
on how I approach position sizing.
1. I have three types of trade:
2. There are three sizes of lots available: MICRO, MINI
3. There are a few types of currency pairs in my eyes:
USD major – EUR/USD, GBP/USD, USD/JPY and
Major commodity pairs – AUD/USD, NZD/USD and
Minor commodity pairs – USD/NOK and USD/MXN
Cross-Rates – EUR/GBP, EUR/JPY, GBP/CHF,
AUD/CHF, NZD/CHF and AUD/NZD.
Commodity cross-rates – EUR/AUD, GBP/AUD,
EUR/NZD, GBP/NZD, EUR/CAD and GBP/CAD.
JPY pairs – AUD/JPY, CAD/JPY, CHF/JPY, GBP/JPY
Others USD/SEK, AUD/CAD, SEK/JPY, EUR/SEK,
and EUR/NOK Obviously there are hundreds of
currency pairs but those listed are the ones that
interest me and form the basis of my Forex trading
I approach each category listed above by RISK
MANAGEMENT and RISK TOLERANCE.
This is based upon the broker account used.
Inside the EDUCATION tab of the PREMIUM
SERVICE there are a couple of articles about why I
trade with multiple brokers, these articles should
also be read to get a wider understanding of my
RISK VS POSITION SIZING
The maximum that I will risk is about 3% of my
broker account balance in total for all active live
Many of you have already stated that you see this
as too low.
From my perspective it is the only way to give you
longevity in trading.
The Forex market takes no prisoners, if you are not
boxing clever you will get wiped out eventually
unless you trade with disciplines.
This is an overview, a macro level view, of my
approach to position sizing.
USD MAJORS & MAJOR COMMODITY PAIRS –
usually MINI or STANDARD LOT TRADES, but
never close to the 3% limit to allow me flexibility to
add or reduce the position size/exposure.
FLASH TRADES would in 99% of cases not be
done on other categories of currency pairs unless
after a news breaking data release.
These trades would be MICRO or MINI lot trades,
maximum of 0.5% RISK per trade.
These are small trades most of the time.
All currency pairs are entertained and risks are
I will risk maybe 0.5%-0.75% if pushed (my
TRADING PLAN says 1% but this is for extreme
circumstances) on USD majors, JPY pairs, Major
Commodity Pairs and between 0.4% - 0.5% on the
A mixture of MINI, MICRO and STANDARD lots are
Do not be surprised when I tell you that for some of
the more exotic pairs my trade size to get me
started can be just 4/5 MICRO LOTS.
These types of trades are usually reserved for the
I have had real identity issues with this category in
These trades are all limited to just one of my
As a general rule: STANDARD LOTS are only used
for USD related currency pairs plus the EUR/GBP
So to recap, even though I have my 0.5% limit on a
trade I DO NOT max out on a position / trade size
I will add to trades and reduce trade sizes before
Fibonacci levels, pivot points or simple previously
noted heavily used horizontal supports.
With JPY pairs when I used to trade them quite
frequently, round numbers would do either at 50 or
For the exotic pairs I tend not to add or reduce
sizing too much, most of my playing with sizing is
due to risk.
STANDARD LOT trading attracts more risk than
MICRO LOT trading, hence the reason I am always
looking to add to or reduce my RISK EXPOSURE.
Conversely, that's why I also tend to let MICRO lots
either work or not work out.
When entering a trade where I want to have say a
STANDARD LOT size, I may just start with 2-5 x
MINI lots and add as the trade takes momentum in
the direction that I want.
This allows me to have an initial wider stop in place
that I can tighten later as I add to the trade size.
It is not rocket science but it does take practice.
Knowing the maximum risk per trade per broker
account is the first thing and from then on it’s plain
Let me reiterate, its all about RISK MANAGEMENT.
You can be speculative to a point, but at the end of
the day longevity in trading emanates from being
savvy and limiting RISK EXPOSURE along with
chart analysis and identifying chart high probability