EQUITY MANAGEMENT

I won’t stress the importance of equity management principles here as I have
written sufficiently about this subject in my other eBooks. I strongly
encourage you to reread those sections in the other eBooks and be sure to
adhere to the guidelines presented.
In scalping it is best to maintain a maximum risk of 2% on any single trade,
however when starting off it would be even better to reduce it to just 1% at
least initially while you are still learning. If you are following the “Forex
Freedom” plan your risk levels will be higher, and the justification for this is
explained in my eBook “Forex Sailing”.
To help you quantify this here is a chart of how many lots you could trade
depending on how much you have in your trading account. If you have
already figured out how many lots you can trade doing “Forex Surfing”
techniques (2% at 20 pip stops) then simply use the same amount of lots as
it’ll automatically maintain the proper proportion for your 1% since you are
trading with typically half the stop size.
This chart shows appropriate lots amounts (based on the 10 pip stop) against
various margin account sizes. Keep in mind that once your account surpasses
$100k you should scale your maximum down to 1% to even 0.25% (not
shown) when you reach a million to preserve your equity from substantial
drawdowns. This chart shows the maximum “Amount(K)” you can trade
based on the 10 pip stop. Remember, 10K = 1 mini lot, and 100K = 1 regular
lot (or 10 mini lots).