Question about 1% rule and margins

January 29th, 2014, 07:20 PM

When I place a spot forex trade for 100 shares, it says margin used $5.00. This is 1% of my $500 practice trade account.

My question is should the 1% rule be applied to my margin, or should it be applied to the $500 in the account?

January 29th, 2014, 10:12 PM

The 1% rule relates to the amount that you risk on each trade, not your margin..

The distance between your stop and your entry defines the $ risk, and combined with your account size and risk % you can determine how many contracts to trade.

Question about 1% rule and margins

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Question about 1% rule and margins