Money management for losses

[shaunna75]

There would be a chance that you lose in Forex trading but what is important is how you would handle that loss. It is easier to manage losses on a 5 min time frame because a trader is able to monitor charts all the time and the losses are usually small due to the nature of 5 minute trading: price ranges are smaller and it is easy to tell when the market starts turning against your position. Hourly charts on the other hand have wider price ranges and therefore require wider stops to be placed and larger losses to be taken. So it is best to fix the loss as soon as you notice the chart dropping. How do you manage your loss?

 

[TTTC]

Think about it differently.......
Risk the same amount on each trade would be my advice.
If you risk say £100 on a trade why does it matter how far your stop is ?
So if you stop is 10 points sways you go £10 a point. If your stop is 40 points away you'd risk £2.50 a point.
Each trade has the same probability of winning, so you risk the same on each trade, surely!
This is called trade sizing, or that's what I call it.
Risk say 1% of your account on each trade. Why let your stop determine how much you risk?

Good luck

 

[FXSense]

The most effective method is the simplest too - if you make sure that your stop loss is, say, a quarter of the value of the profit (set a limit order for this - make sure it's feasible - use Bollingers eg.), and you do this multiple times, even if you're right only 50% of the time you will profit...

 

[ph_trader]

I try to keep my risk as low as possible, but I find that trading a bigger time frame is a lot better when it comes to avoiding loses, it works for me and thats the reason I shifted from scalpin to swinging

 

[mingbao]

I agree, it's simple to control the loss is to set stop loss for every trade.

 

[hgh]

everybody knows the stop loss, but not everyone remember when the fear comes.. It's hard to control the emotion during the trading.

 

[Jack Francisco]

There would be a chance that you lose in Forex trading but what is important is how you would handle that loss. It is easier to manage losses on a 5 min time frame because a trader is able to monitor charts all the time and the losses are usually small due to the nature of 5 minute trading: price ranges are smaller and it is easy to tell when the market starts turning against your position. Hourly charts on the other hand have wider price ranges and therefore require wider stops to be placed and larger losses to be taken. So it is best to fix the loss as soon as you notice the chart dropping. How do you manage your loss?

The best way to manage avoiding loss when trading in 5 min or 1 Hr time frame is using stop loss and taking profit. It is good way to avoid big loses ,we can measure how much amount will to be risk that able to bear,and we can set target point that become our goal ,and for achieved our goal , its required good analysis in the market.