I just had a question on the bottom of one of our videos asking from Asanka, how many open trades can I have open at any one time?
It’s a great question Asanka, and the rule of thumb that I use is I allow myself to have up to four open trades open at any one time and I don’t want to be risking more than 1% in any one of those trades.
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Now as I look back at my trading, I don’t think I’ve ever had four open positions at 1% in my account. However, in principle I would allow up to four open trades so that would have to be four open trades that I thought were really high probability scenarios all up to 1% without allowing correlation.
So for instance, if you are trading the U.S dollar, Canadian dollar pair and the U.S dollar Swiss franc pair, you don’t want to be trading them both with 1% of your account because you would essentially be doubling up your risk on the U.S dollar.
So you have to factor that in when you’re trading multiple open trades. You don’t want to be trading two currency pairs with the same currency.
So for instance, if you’re trading the Euro, U.S dollar and the Euro, Pounds, you’ve got a double exposure to the Euro, so you’d have to allow for that in your risk total.
So as long as you’ve factored that in, I would say Asanka up to four open trades at any one time, up to 1% risk in each of those trades. But as I said, I’ve never used that maximum amount, but in theory, that’s what I think would be reasonable to allow yourself to go to.