Perhaps the most important and most overlooked part of forex trading is Money Management. You can be using the best trading strategy in the world, but if your money management is not right you can still end up losing money. It is often said that money management is the key difference between how the pros trade and how an amateur trades. Money management takes discipline and focus but the reality is that very few traders have the discipline to practice sound money management principles. 

The crucial parts of Money Management are position sizing and risk management through the use of a stop loss system. Position sizing is about deciding the number of lots per trade on the forex market.  Factors to consider are:

• Percentage of Account Balance to risk: Somewhere between 1% to 3% per trade, personally  I risk only 1% per trade. 

• Leverage: The more leverage, the less the margin requirement, retail forex brokers offer leverage from 50 to 500:1, a fairly huge variation. 

• Margin Requirement: How much margin does each trade need? ie. at 100:1 Leverage you need $1000 of Margin per full lot traded or $100 per mini lot traded.

• Your own tolerance for risk: This is a question only you can answer, but hopefully these guidelines will give you some parameters to work from
• Stop Loss. Having a stop loss in place and using a stop loss strategy is an absolutely vital part of risk management. Being able to take relatively small losses when a trade goes bad is critical, not every trade can be a winner. A swing trader with a focus on trading off a daily chart is going to be using much larger stops than a day trader.