Trading CPI day? Decide your risk before the number, not after đ
CPI lands Tuesday at 6:30 PM PKT, and prices can jump in seconds. Decide the most you can lose on one trade before you enter, then size the position from your stop.
Example: risking 1% of a $1,000 account is $10. If your stop is 2% below entry, the position is $10 / 0.02 = $500. If your stop is 4% away, it's $250. A wider stop means a smaller position, not the same position with more hope.
Last week's more than $1.27B in liquidations (ForexCrunch) is what happens when position size outruns the stop. $BTC fell 5.5% in one day on Nov 5.
Two habits for event days: don't add leverage because a move feels certain, and know where your stop sits before volatility spikes.
Do you size by percentage risk or by a fixed dollar amount? đ
#CPITestsDecemberRateOutlook #RiskManagement
CPI lands Tuesday at 6:30 PM PKT, and prices can jump in seconds. Decide the most you can lose on one trade before you enter, then size the position from your stop.
Example: risking 1% of a $1,000 account is $10. If your stop is 2% below entry, the position is $10 / 0.02 = $500. If your stop is 4% away, it's $250. A wider stop means a smaller position, not the same position with more hope.
Last week's more than $1.27B in liquidations (ForexCrunch) is what happens when position size outruns the stop. $BTC fell 5.5% in one day on Nov 5.
Two habits for event days: don't add leverage because a move feels certain, and know where your stop sits before volatility spikes.
Do you size by percentage risk or by a fixed dollar amount? đ
#CPITestsDecemberRateOutlook #RiskManagement