A practical formula for money management in forex trading is to determine the position size based on a percentage of your trading capital and the risk per trade. For example, risking 1-2% of your capital per trade ensures preservation of capital and limits potential losses. Calculate the position size by dividing the risk amount by the stop loss distance in pips. This formula helps maintain consistent risk across trades, regardless of the currency pair or timeframe. Additionally, regularly reassess your risk tolerance and adjust position sizes accordingly. Remember, effective money management is crucial for long-term success and protecting your trading capital in the dynamic forex market.