Managing Trades in Volatile environment
Entering a trade with little drawdown so a stop loss is not violated is paramount to long term success as a trader. One has develop a great degree of patience as a trader which can only be achieved by trading an appropriate position size for your account size. For example if someone has a 25,000 K account size a common rule is to not risk not more than 250 dollars or 1% per trade. The rational is that you would have to lose a 100 trades in a row to lose your account which is impossible. However, if that risk is too high for an individual with this account then you can decrease the account size to 100 dollars or less. The goal is to be comfortable with trading so you would be unemotional when you trade as one trading loss should never make one not trade in another 5 min interval. By adjusting your account size you can manage trades better in a volatile environment.