Did you know that most traders don’t use proper risk management at all, and this is the main reason their account gets creamed fairly quickly?
So many traders are opening orders purely based on lotsize, without taking into consideration how much risk that lotsize actually is. If you place a 1 lot trade on an account, depending on the SL and your account size, that 1 lot equals a certain risk percentage. However, if that trade is a loser and you use the same lotsize and SL for the next order, the risk percentage for the new order will be greater. If you continue doing this through a number of losing trades, you suddenly have a big hole in your trading account.
The bottom line is that you should always know exactly what you are risking per trade, anything else is financial suicide. Back in the day, traders would have to manually calculate their risk per trade, which is quite time consuming, this is also why so few traders do it. The industry standard MT4 trade manager from Pecunia Systems has built-in risk calculation with 1-click execution, so you simply select the desired risk percentage and click buy or sell, and FX Synergy instantly and automatically calculated the exact lotsize to use on the trade. Extremely useful, and very handy for proper risk management.