What Is Your Risk Capital? How Much Money Can You Afford To Lose?

Forex Risk Capital

You need to determine if you can even afford to trade.

Forex trading should only be done with risk capital.

Risk capital is money that you can lose.

This is the kind of money that if you lost, you wouldn’t lose your home, car, spouse, limbs, electricity, etc.

Don’t risk what you can’t afford to lose!

If you’re playing with money that you need to pay the bills, it will have a huge negative impact on your ability to make objective trading decisions.

Imagine how stressed you’ll be while your trade is open knowing you might not be able to put on the food on the table if you get stopped out.

Every time a pip goes against you, you’ll be thinking, “There goes tomorrow’s lunch!”

You don’t want to end up starving, homeless, and broke now do you?

Unless you do.

In that case, go ahead and risk all your hard-earned money in forex.

Don’t be stupid!

If you can’t afford to make dough in the kitchen, then you can’t afford to make dough in the forex market.

Don’t start trading forex with real money until you’ve accumulated enough risk capital. Until then…

Stick to demo until you really know what you are getting into!

Later on, we’ll teach you all about risk management and how you should manage your risk capital.

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  1. What is a Trading Plan?
  2. Why Do Forex Traders Need A Trading Plan?
  3. Why Trading Discipline is the Key to Consistent Profitability
  4. How To Find A Trading Style That Suits Your Personality
  5. What is Your Motivation to Be a Forex Trader?
  6. What Is Your Risk Capital? How Much Money Can You Afford To Lose?
  7. How Much Time Can You Dedicate To Forex Trading?
  8. Which Kind Of Returns Do You Expect To Make From Forex Trading?
  9. What Is Your Daily Pre-Trading Routine?
  10. What Forex Trading Software, Hardware, And Other Tools Will You Use?
  11. Stick With Your Trading Plan
  12. Summary: Developing a Trading Plan