risk management

[Merk Porter]

Many traders are taking good interest in the field of currency exchanges since currencies as securities is more stable than other securities like equity or bond. Yet, the instability of various domestic economies is making forex as a challenging field. Thereby a trader will need to continue his risk management approach. And derivative market has been introduced as a risk management approach to help the traders to keep their wealth position intact against the unwanted price fluctuations of currencies.

 

[hatemypips]

Many traders are taking good interest in the field of currency exchanges since currencies as securities is more stable than other securities like equity or bond. Yet, the instability of various domestic economies is making forex as a challenging field. Thereby a trader will need to continue his risk management approach. And derivative market has been introduced as a risk management approach to help the traders to keep their wealth position intact against the unwanted price fluctuations of currencies.

Do you know any hedging strategies which help to mitigate risk like options hedging or something else?

 

[mason_ritter]

What risk management advice would you give aspiring newbies?

 

[Xevield]

Trading is a game of taking risks and managing them properly in order to convert your losses into profit. A good manager is always a good trader. I am following this quote from the start of my career and I am a good manager. What about you people?

 

[J_C_Anderson]

The main risk management advices are:
- Set daily max.loss limit and split in among all your trades,
- Always stop trading after you hit the limit
- Have a break after loosing day
- Never risk more you can afford to loose.

 

[James turtle]

What risk management advice would you give aspiring newbies?

Don’t risk what you can not afford to lose.

 

[scarlet jones]

I agree , plus you must risk that much money which you don’t want. Risking more than you can afford , can cost you much more times than you thought. It can even make you bankrupt. So, determine your risk tolerance ,set a risk- reward ratio and follow strict risk management practices

 

[hatemypips]

Risk management is the basis of profitable trading. I would divide this direction into two main parts for myself. If you use short-term trading, you need to calculate what percentage you can afford to buy a particular trade. So that you can always get out of the situation if it is unsuccessful. The same approach works when you buy several trades at once. When it comes to investing in the stock exchange, I wouldn't buy stocks of just one company. It is better to remember the diversification of risks and invest in several areas. So that one investment could cover the drawdown in another one by profitability. As in the English proverb "Don't put all your eggs in one basket".

Can you share with us good examples of prudent risk or money management systems, possibly optimisation methods? Do you have any?

 

[AdamCantor]

risk management is key in fx trading. plenty of youtube tutorials for guides, thats what i used

 

[AdamCantor]

I agree , plus you must risk that much money which you don’t want. Risking more than you can afford , can cost you much more times than you thought. It can even make you bankrupt. So, determine your risk tolerance ,set a risk- reward ratio and follow strict risk management practices

well said ^

 

[denys]

Great advice!

 

[hatemypips]

risk management is key in fx trading. plenty of youtube tutorials for guides, thats what i used

Do you know any of them which are worth to spend our time? I watched a lot but most of all try to explain basic things it's difficult to fund something advanced.

 

[danpadcas]

Risk management is the bread and butter of trading. If it's all over the place, you won't last long in this business. For a lower risk and more reliable signals a trader would be better off just sticking to the higher TF such as H4 and Daily.

 

[RachelFX]

What risk management advice would you give aspiring newbies?

1-2% risk max per trade and minimum RRR of 2:1

 

[RachelFX]

It's rather little I'd say.

To little risk or too little R:R?

What risk management would you use?

 

[hatemypips]

Risk management is the bread and butter of trading. If it's all over the place, you won't last long in this business. For a lower risk and more reliable signals a trader would be better off just sticking to the higher TF such as H4 and Daily.

Indeed signals generated on high timeframes using technical analysis perform better, but it's hard to draw lines precisely and determine points of entry and exits. You have to pay special attention to money management because long-term trades consume another resource many of us tend to ignore - time.