Both. I never risk more than 0,5% of my account value on any trade. So the size of my trade depends on where the stop will be. I do trade stock, not currency. However that doesn't really matter when it comes to controlling trading risk.
It does matter because currency pairs are so leveraged that 0.5% is practically no movement at all. Most of these are leveraged 20x or more. That might make your strategy impossible for Forex.
0,5% of your account value would mean $500 on a $100K account. In this example if my stop would be 50 pips away, my size would be 1 lot, if my stop would be 100 pips away my size would be half a lot. Same with stocks, if want to buy a stock valued at $100 and my stop would be $10 i would buy 50 shares, if my stop would be $5 i would buy 100 shares. No difference at all.
there is nothing wrong with placing trades based on fundamentals.however it is generally believed that these take time come to fruit so you have to take that into account. a tomato does not change fundamentally but it's price fluctuates wildly at least in our Indian markets. a change in fundamentals will impact price but it may not do so immediately. i should point out that i have heard big boys like Soros base their trades on fundamentals as well as technicals......technicals has over time gained some credence
these do not feel like trades. there is a strong fragrance of investment emanating from these actions
These are the main moves in markets: Stocks The S&P 500 Index was little changed at 3,192.23 as of 4:00 p.m. New York time, hitting the highest on record with its fifth consecutive advance. The Stoxx Europe 600 Index declined 0.7% to 414.92, the first retreat in a week and the biggest drop in more than two weeks. The U.K.’s FTSE 100 Index gained 0.1% to 7,525.28, hitting the highest in almost 20 weeks with its fifth consecutive advance. Germany’s DAX Index declined 0.9% to 13,287.83, the first retreat in a week and the biggest drop in more than two weeks. The MSCI Emerging Market Index jumped 1.3% to 1,102.51, hitting the highest in 18 months with its fifth consecutive advance. Currencies The Bloomberg Dollar Spot Index climbed 0.2% to 1,194.79, the biggest increase in more than three weeks. The euro was little changed at $1.1146, the strongest in more than six weeks. The British pound sank 1.6% to $1.3123, the weakest in almost two weeks on the biggest tumble in 13 months. The Japanese yen was little changed at 109.52 per dollar. Bonds The yield on 10-year Treasuries increased one basis point to 1.88%. Germany’s 10-year yield declined two basis points to -0.30%. Britain’s 10-year yield fell six basis points to 0.762%, the lowest in almost two weeks on the biggest fall in two weeks. Commodities West Texas Intermediate crude gained 1.1% to $60.89 a barrel, the highest in three months. Gold was little changed at $1,475.96 an ounce.
Then I picked the wrong day to bet on the pound. My usd/chf is now in the positive, btw. But it's all just luck.
Because I'm trying to bet on fundamentals? Are you saying I should trade a chart without even knowing or caring what the chart is of?