Give yourself plenty of room to tolerate an adverse move

Give yourself plenty of room to tolerate an adverse move

The Forex market for a currency pair will typically fluctuate on any given day, which means it moves both higher and lower.  When taking a position in a financial market that involves such volatility, traders need to remember to allow plenty of room for the market to move against their positions before it ultimately goes in the anticipated direction.  This means sizing your Forex trading positions in a manner that is appropriate for the volatility of the currency pair you are trading, your personal risk tolerance and the amount of funds available as margin in your trading account.  It also often means choosing your stop loss levels in such a way that they will be protected by established support and resistance levels on the exchange rate charts.