#CommunityAMA Setting a budget for each trade in forex involves risk management and position sizing. Here’s a step-by-step guide: 1.Determine Your Risk Per Trade A common rule is to risk 1-2% of your total trading capital on a single trade. Example: If you have $10,000 in your account and risk 2%, your maximum loss per trade should be $200. 2.Set Your Stop-Loss Level A stop-loss limits potential losses by automatically closing the trade at a predetermined level. Example: If you set a stop-loss of 50 pips, you must calculate your position size so that a 50-pip loss equals $200. 3.Calculate Position Size (Lot Size) Use this formula: Position\ Size = \frac{Risk\ Per\ Trade}{Stop-Loss\ (Pips) \times Value\ Per\ Pip} Position\ Size = \frac{200}{50 \times 10} = 0.4\ Lots 4.Adjust for Leverage If using leverage, ensure your trade size aligns with your capital to avoid overexposure. 5. Consider Risk-to-Reward Ratio Aim for at least a 1:2 ratio (risking 50 pips to gain 100 pips). This ensures long-term profitability even with a lower win rate. By following these steps, you can control your forex trade risk effectively while maximizing potential returns. Do you need help with a specific trading platform?