Novice forex traders will often make the error of ramping up their trading size too quickly once they gain confidence after a few good trades. Once their luck shifts, they can then find themselves facing greater losses than what they can comfortably afford. Also, traders do not always have the same emotional reactions when trading large amounts compared to smaller sizes. It is therefore usually preferable to increase your trading size gradually as the size of your forex account and your degree of comfort operating in the forex market grows. Such trading size increases should also be in proportion to the amount of risk you feel comfortable taking. This sort of conservative trade sizing strategy helps avoid potentially costly automatic closeouts by your forex broker if the margin in your trading account becomes insufficient due to unexpected losses.
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