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Trade
Currency trading: how to manage risk
Regardless of whether You are a professional trader or just an Amateur, from time to time try to trade in the foreign exchange market, there are always ways to improve Your trading strategy. These methods are very diverse, and different approaches lead to different levels of success. Useful tips can be found everywhere: online, in the news, in seminars carried out by professionals.
One of these useful strategies teaches us to manage the risk. The contradictions of Forex is that profit is easy to get but equally easy to lose. It is useless to try to make a fortune in the market if You are not going to protect yourself from loss - success means nothing if you cannot contain it. Understanding how we can and should manage the risk, it is vital for success in the profession of a trader.
Of course, in theory everything looks simple, but how do You actually minimize the risks?
Use the takeprofit orders (limit orders)
Limit order - the best friend thinks of a trader. It works in achieving the desired level of profit, telling the system to close the position at the moment, when Your trading goal has been achieved. Make sure that You have calculated this level before You start the agreement, and this strategy will protect You.
Use stoploss orders (limit losses)
Another important tool in the Arsenal of the trader stoploss order that allows You to control the amount that You are willing to take the risk. Such an order will work when it is maximum level of losses that is acceptable to You and the system will exit a losing position. This means that when opening the transaction, you can pre-place a limiter of possible losses, thus preventing your probable financial collapse. Any normal person enough common sense and was bound to use such orders.
Make the most of available tools
A common mistake that traders from the Amateurs, is that they do not fully use all the capabilities of setting stoploss and takeprofit orders. Be sure to take the time to formulate these parameters in the planned operation. Install these options, the profit-taking and losses in all operations. This removes the emotional factor from the trading equation, reducing the task of the trader to simple and cold mathematical calculation.Inexperienced traders, however, often decide to steadily follow the quotes on your screen, while sharply reacting to all the movement in their open positions. They are trying to squeeze out of position high, often not having enough time to react to the reaching critical levels, and thus endangering my whole trading strategy as a whole. If You regularly use simple and available tools, this frantic panic and losses in the trade can be easily avoided.
Of course, Forex trading always carries risks: it is inherent in its principles. However, this does not mean that the risks can be minimized and controlled. Only You can decide what approach should be given preference – weighted or "risk". Although the answer to this question is already evident.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 276
| Rating: 0.0/0 |
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