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Thread: Risk Management Methods

  1. #1
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    Default Risk Management Methods

    When trading, a Forex investor can multiply capital, and the risks to loose not only potential earnings, but the invested money as well. The deviation from an average expected yield determines the investor’s risk in the financial market.

    This kind of deviation can bring high profit as well as great loss.

    Financial risk management does not guarantee a successful trading, but assembles important parts of it. Every currency operation is a risk. That is why usage of general management methods decreases potential losses.

    1. Stop order setting;

    2. Capital share investment;

    3. Trend trading;

    4. Emotion control.

    Risk management methods are used after positions are opened. The main risk management method is an order setting that restrains losses.

    Stop loss (literally means to stop losses) – is a point where trader goes off the market to avoid a disastrous situation. You have to set a stop loss when opening positions for preventing losses.

    There are several types of stop signals:

    Initial stop signal – determines the deposit amount or interest rate that the trader is ready to lose. When the price moves toward this position and reaches it, the trader’s fixed level position closes, not exceeding the loss preset by the trader.

    Trailing stop signal – is when price moves towards a position and stop signal is set right after it, according to trader preferences. In case the direction changes, the price reaches that signal and the trader goes off the market, potentially having earned profit (depending on when the price started moving).

    Profit raising – is when a net profit has been earned and position is closed. S

    top signals at times – is when the market is not able to provide the necessary yield rate in the course of time and the position closes.

  2. #2

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    thanks for your share . this is a basic about money managermet.

  3. #3
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    We must have good management skills to make us get maximal result although we just have small amount to start trading in forex. We must be discipline when trading to get more maximal result in forex. Small amount also can be used to trade in forex.

  4. #4
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    Without money management and risk management, we will only lose our money in forex. Try to more understand about forex trading to make us be more ready and will make us get more maximal result in forex. Try to maximize our fund as well as possible. To learn about forex, try to use demo account first.

  5. #5
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    Risk management also helps you to deal with the emotional and psychological effects of trading. If you are employing risk management well, then a loss is less likely to hit you as hard as if you ignore it and over leverage. Thus a loss is not the end of the world and something to learn from rather than the end of the world.

  6. #6
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    Forex is a business that has a lot of risks that we need to minimize the risk for that we need good risk management to greater risks can be minimized by good. we can use the SL when trading in order to minimize the risk incurred by either

  7. #7
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    If we want to get more maximal result, risk management skills must be owned by trader. We can hone it using demo account and surely, we must also learn from our experience to make us be more ready in forex. We also can try to use small amount first to start trading with real account.

  8. #8
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    we will not know the risk of what will happen in this forex so we need to have good risk management, with us having good risk management we are able to minimize the risk to the well and we can make a profit in this forex

  9. #9
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    risk management is required by a trader, a trader should know how to can trade so well that the result will be a maximum

  10. #10
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    Risk management is an essential but often overlooked prerequisite to successful active trading. After all, a trader who has generated substantial profits over his or her lifetime can lose it all in just one or two bad trades if proper risk management isn't employed.
    Bottomline:
    Traders should always know when they plan to enter or exit a trade before they execute. By using stop losses effectively, a trader can minimize not only losses, but also the number of times a trade is exited needlessly. Make your battle plan ahead of time so you'll already know you've won the war

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