Finding the proper trade size is of the utmost importance. Successful trading strategies require you to know your risk sentiment. Risking more than you can is very problematic as it can lead to bigger losses.
A popular advice in this regard is to set a risk limit at each trade. For instance, traders tend to set a 1% limit on their trades, meaning they won’t risk more than 1% of their account on a single trade.
For example, if your account is worth $30,000, you should risk up to $300 on a single trade if the risk limit is set at 1%. Depending on your risk sentiment, you can move this limit to 0.5% or 2%.
In general, the lower the number of trades you are looking to open the bigger the position size should be, and vice versa.
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