Risk Management Tips

Proper money management and risk management
can be your secrets of success. After you have
defined your goals and selected a strategy that suits
your psychology, it’s time to think about risk
management rules.

The more
risk you take,
the more money
you lose.

True risk management is essential for saving and
growing your capital. And there no empires built in a
couple of days, no great capitals made by a couple of
trades, no great financiers who have become
professionals overnight.
Here are some Forex trading tips on how to improve
your risk management and achieve more profit.

The first and the most important trading tip.
Losses measuring doesn’t mean getting rid of
them at all, but you can lose less. Figure out
where to set your stop loss orders, calculate it
and think about whether it’s a comfortable
level for you. Don’t fall into a trap of moving a
stop loss farther or setting it too tightly.
Control your losses

Of course, trading $10K with $300 on your depo
and 1:200 leverage looks sweet. Different
brokers can promise that you’ll double your
funds in a couple of seconds. But in fact, it rarely
works. Too big leverage can harm an account
badly. Better start with small transactions or use
lot calculators that will offer you not bad
positions. Moreover, you won’t be strongly
engaged in the process if you trade small
orders.
Use correct lot sizes

This point is similar to the previous one in some way. Don’t think that trading with a large
leverage always leads to big profit. Surely, it’s a great instrument that may help enlarge your
depo, but it’s tied to severe risk as well. The larger leverage you use, the more margin funds
you can lose. Better trade with a moderate leverage. It’s a useful feature, but has to be used
very carefully.
Don’t overleverage

Here’s another handy Forex trading tip: don’t work
with the same currencies. I mean if you go long on
USD/CHF and short on EUR/USD with a lot on each
pair, it will mean that you are buying 2 lots of USD.
And if the US dollar falls, you’ll lose in both trades.
Better choose some other currency, for example,
GBP/EUR instead of EUR/USD.
Track your overall exposure

Don’t try to catch the market and squeeze it to
the last penny. If it was so simple, someone
would do it already. No one gets rich overnight.
So, don’t aim at 100 pips per day and stick to
your trading system.
Tame your greed

Getting out the market too early or too late is never
good. You either lose potential profit or lose your
margin. You can use indicators or Price Action
patterns in the Forex trading to know that it’s time
for exciting. So, after some practice, you’ll be able
to distinguish such moments intuitively.
Know when to stop trading

Keep educating yourself and try to be a better
trader with every closed trade. You will learn how
to “feel” the money management system. It won’t
seem so difficult after you work with it for some
time. Its rules will become essential and
understandable.
Always keep on learning

Any business needs a plan, calculations,
and analysis. So does Forex. If you are on
the way to understanding this fact, read
our trading tips once more and make your
own conclusions on how you will manage
your risks.

Thank you for
watching
the presentation!