DislikedWhat is the max margin for SL that you will consider a trade to be a viable option? Is there any way to reduce the SL as, I am seeing a lot of setups that look good, but the SL seems to be around 50 pips or more in some cases.Ignored
I wouldn't say there is a "max Margin," other than How much are you willing to risk, and can you size your position so that if your SL is hit, you do not lose more than the maximum risk amount.
For example, if you are trade a $2000 acount, and your max risk is 2% of your account/trade. Then if a particular set up has a 20 pip stop loss, then on that trade, you can trade two (2) mini lots (20K = $2/pip * 20 pips SL risk = $40 risk = 2% of $2000). On the other hand, if the trade requires a 50 pip stop loss, then your size for that trade must be kept to eight (8) micro lots or $8000 (8K = $0.80/pip * 50 pips SL risk = $40 = 2% of $2000).
See how that works?
And if you have a broker who has a 10K minimum size, you should skip the trade with a 50 pip stop loss, because you would be risking $50, which is 2.5% of your account.
If you have a broker with flexible trade size, you can take those trades with a higher initial risk, because you can keep your risk level stable through sizing your position.
