Risk Management in Forex Trading.

[sofeenevu]

Risk management is one of the crucial element in forex trading which will determine how much professional you are and how much you able to handle the money machine. If you wrong on it, they you are really in trouble.

[vc2204]

Money management is very important to understand before we are trading forex. The use of money management, is a form of risk management. It is very important to make our trade more systematic and survive for a long time.

[casiotab]

The danger control especially in currency trading of more things that must be honored by the great majority of investors in the currency trading so they can accomplish the biggest control of money on this account, which have a new way and brief.

[aisfx]

Money management for some trader is diferent and unique, I have a friend that use only 30 pips MC style with huge profit target. Most of the expert trade give advice to use to 1 to 3 % of the total account balance as risk in the trade and I think it is very good management. You must make sure of each trade or position you open must have some support from indicators. That's how you trade in forex.

without Money management, the forex trader will kesulitn in determining the open position, because the key to calculate the profit target and the condition of capital and risk management was a great fit Money calculation mode, and the power margin and large lot

[yudijoni]

Money management for some trader is diferent and unique, I have a friend that use only 30 pips MC style with huge profit target. Most of the expert trade give advice to use to 1 to 3 % of the total account balance as risk in the trade and I think it is very good management. You must make sure of each trade or position you open must have some support from indicators. That's how you trade in forex.

[man_yoyo99]

When critria are complied with as stipulated in my rules... Maximum of 1.5% risk per trade of available capital in the account as determined by the 5min . Risk management calculator on an excel spreadsheet.

[waqar arif]

Risk Management in Forex Trading

Risk Management in Forex Trading is a term that is very important in trading world and at the same time is a major point which mostly gets out of focus when traders start real time trading. The first and foremost difference in trading a demo and a real account is the human psychology. The point is here that how to overcome this problem?
The best way to go is to practice hard and I strongly recommend to practice for at least 3 months as this time period will cover up learning the different time frames as well during that time; a trader can experience all effects of fundamental news and attributes.
Devise and test a risk management strategy over that period without changing it, no matter it is not providing any profits, just keep using it and analyze your strategy after 3 months of so that you can average out all the good and bad runs you had during that time.
Now coming to other part, i.e., devising a good risk management strategy. Originally the market used to not be for the small traders as brokers only allow standard lots or micro lots. Therefore if you are trading a small account, you are risking too much for a trade. In the recent years, there are introduction of new brokers that allows you to trade even 1 unit. This way, you can still apply the same proper risk management strategy or else your account will be blown before you know it.
To devise a risk management plan, first of all figure out what is the risk percentage per trade? For example, how much percentage of the account can be lost in the worst case of a trade?
Usually good traders make 1-2% as a mark to risk per trade. Next you have to set a percentage % of how much can you lose in your forex account (your maximum drawdown). For example, if you lose 30% � 50% of your account using a system. You should stop trading altogether and reflect back on your system. Find out why is it not working and where to tweak it to improve your future trades.
Once the maximum drawdown and the risk percentage per trade is defined, Always keep your stop fix and don�t extend it while you are winning trades.
I have seen traders extending their stops in hope that the market will come back and they won�t have to face loss in that trade. Believe me, often I have seen traders getting them into this situation and loosing out all account. There will also be times when you will be just stopped out and market will reverse, even in those cases don�t get disappointed and keep following the same strategy.
Therefore, even before any one starts trading, one has to devise a proper risk management. With a proper risk management system and combined with a good trading system, you are on the right track to success in forex trading.
Ezekiel Chew
Asia #1 Forex Mentor from www.asiaforexmentor.com

Actually it was a very useful thread that i have read about the risk management and i agree with the every word written in it from start to the end you are right about the risk management because managing your risk in the Forex is very crucial .....and can lead you to the profits.....!!

[abayomi kolade]

yes risk management in forex trading is very important because with proper money management we can always be at the winning side of the trade so i think with just 3 percent of our account to risk we can always be at the winning side of the trade so i think i will advise newbies to always risk just 3 percent of there account

[netros]

before entering the forex business, we must understand about risk management first. because forex risk too much, it is the most risky business I've ever seen that is why many merchants add their account every day because they do not understand this business.

[zahidrock]

i think risk management could help us to protect our capital from loosing rapidly that caused by emotion while our trading.and it could help us too to growth our capital and compound it from our profit,but the most important thing is that we must discipline to it.

Yes if you use risk management then you can easily protect your balance on trading time. I think it can always help you to protect your balance from higher losses. And every trader need to use it.