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Trade
The risk of Forex
The theme of risk in Forex is often associated with errors that need to operate in the market only with guarantees. That is, people believe that trade on the foreign exchange market without the risk of possible. I hasten to disappoint, but a trader no one asks, he's here "to stake their money or not, if the person is already exposed position.
Once a scalper opens a trade, he immediately falls into a state of uncertainty. In trading it is impossible to know anything for sure. Each transaction for trader it is a mystery, because people can only assume with some probability about what will happen to the price further, but it is impossible to know for sure. This means that for a complete lack of risk on Forex, a trader must not trade at all.
Another question is whether the currency speculator to manage your risk in trading? So, here it is in the hands of man, and you will need to use it. From the beginning, the speculator does not understand what is happening, and terms such as lot, trading system and so on, it is still not known.
This means that the work performed by the trader, at this stage would be meaningless, is built on a sequence of coincidences. Despite the size of the Deposit and other important parameters that a trader choose a lot of "by eye".
Risk assessment in Forex
Risk assessment in Forex is a very important paragraph learning a profitable trade. Here a large number of factors which at first sight are not close to you of capital management are related to issues of efficiency of use of capital.
To conduct this assessment, the person must provide at least the following factors: features of the trading system, the number of trading instruments used, the maximum number of simultaneously open trades, the maximum drawdown during the testing of the system.
It would be a mistake ignoring considering the number of tools that can be used in the work. Given the maximum drawdown when testing the system, the trader may not take into account that this value applies only to one instrument.
Likewise, you should examine the problem areas with a loss of all currency pairs that are expected to add to the work. At the same time, should pay attention to the same time periods, the sedimentation of different pairs. If the instruments are correlated, then there may be times when the drawdown on all currency pairs involved in the trade, on the same time.
To assess the costs and maximum number of open trades while trading. Can go so that will be fixed too much amount of margin for each position and, perhaps, it will be a disadvantage for the new deal at all.
Thus, the trader should provide for worst-case scenarios that, starting from them, to find the optimal settings for the lots. Otherwise, without considering these nuances, it is possible one day surprised to observe the development of an unfavorable situation.
The statistics in the assessment of the risks of Forex
The trader should test the system for a long time interval to obtain the best statistical indicators that had a high degree of accuracy. Only in this case, the magnitude of maximum subsidence obtained in the testing process, will be taken into account for the selection of the lot.
Thus, it is desirable to take the values that were obtained, and significantly large, exceed the test at least twice. It is possible that in the future the market will be such a situation that our system will show you a large drawdown.
By considering the above parameters, the speculator will be able to optimally choose the lot sizes for all trading instruments. It will be important not only to mitigate risks but also to improve efficiency. If we set too small values for the volume to work, the yield will decrease and some of the capital for the Deposit will be unreasonably lying around. Therefore, you should pay attention not only to how would not put too healthy lot, but it would not understate his value too much.
The degree of risk that is used in the work, as well can affect his subjective view about trading. Some people may consider the risk of a noble cause, while others try by all means to reduce it, despite the low yields. In this situation, it is possible to allocate those rights and who is not. Most importantly, this choice people have made, after analyzing your trade, making sure that the kind of work he will now be comfortable.
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| Category: Forex | Added by: (05.11.2017)
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| Views: 295
| Rating: 0.0/0 |
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