The 2% rule is one of the most recommended risk management tools by professional traders. It will surely help you survive and make profits in the market.
Today, I apply this rule to Olymp Trade Forex trading. Moreover, I’ll give some reasonable methods for you to manage money safely.
What is the 2% rule?
The 2% rule is simply understood that you can only have a maximum loss of up to 2% of the total money you put into the market.
For example, I use a Demo account in Olymp Trade with a capital of $10,000 and 2% of $10,000 is $200. So, every trading day, I am only allowed to lose up to $200.
Apply the 2% rule to Olymp Trade
I will give an example on a DEMO account for you to understand. My capital is $10,000 and the maximum risk per day is $200. If I lose all $200, stop trading and take a break.
Step 1: Forex trading
I search for some Forex currency pairs and start trading. Today, I enter 3 orders. The total Stop Loss of all orders will not exceed $200. That means if my 3 Forex orders are wrong, I only lose 2% of my capital.
Step 2: Fixed Time trading
When the Forex orders are profitable, I will start trading Fixed Time. You should prioritize the asset you have used to trade Forex. Like the example below, my Forex EUR/USD order is profitable, I continue to trade FTT with EUR/USD.
Just like that, you will continue to follow the main trend you predicted. The more profitable the Forex order, the more FTT you can trade.
Step 3: A stopping point
– When all Forex orders hit SL, you lose 2% of your capital and stop trading.
– Or when your Forex orders win but your Fixed Time Trade orders lose. In this case, you break even and can also take a break.
– Or when you win both Forex and FTT.
Olymp Trade trading experiences
Don’t focus 100% of your capital on Fixed Time Trade. Split your capital into both Forex and Fixed Time. The biggest advantage of Forex is Stop Loss. While the price moves the same as your Forex prediction, it will be easier for you to trade Fixed Time.
For me, the 2% rule is extremely effective. It’s because I always have a stop to exit the market. In particular, the 2% rule helps me keep my money safe. And when the money is still in my pocket, I will have more chances to make profits in Olymp Trade.
Join the Olymp Trade Club Signal Group: https://t.me/olymptradeclub19