How to reduce the risk

Determining how much of a currency, stock or commodity to accumulate on a trade is an often overlooked aspect of trading. Traders frequently take a random position size; they may take more if they feel "really sure" about a trade, or they may take less if they feel leery. These are not valid ways to determine position size. A trader should also not take a set position size for all circumstances. Many traders take the same position size  regardless of how the trade sets up, and this style of trading will likely lead to under performance over the long run.