Decide on Your Investment AmountChoose a starting amount you can invest comfortably without financial strain. Many traders begin with smaller amounts to build confidence. Investment management involves assessing capital, setting position sizes based on stop-loss, using leverage carefully, and maintaining a risk-reward balance to protect your funds and maximize potential returns.
Set Your Risk Tolerance
Determine how much of your capital you're willing to risk per trade. A common rule is 1-2% of your total account—so for a $10,000 account, limit risk to $100-$200 per trade.
Calculate Position Size
To find an appropriate position size based on your risk tolerance, use this formula:
Position Size = Amount Risked Stop-Loss (pips) × Pip Value
Position Size= Stop-Loss (pips)×Pip Value Amount Risked
Example:
If risking $100 with a 50-pip stop-loss at $10/pip, your position size would be 0.2 lots.
Learn Strategies and Market Analysis
Successful trading depends on understanding market analysis and strategy. Study technical and fundamental analysis to pinpoint entry and exit points. Learn popular strategies like trend following, scalping, or swing trading, but choose those that align with your risk profile and market insights.Test with Demo Accounts
Before diving in with real money, use a demo account to practice. Most brokers offer demo accounts that replicate live markets, allowing you to test strategies and gain familiarity with the trading platform without risking actual funds. Treat it seriously—it’s a powerful tool for learning under real market conditions.