Risk Management in Forex Trading.

[Mustansir]

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

wow dear aap ny bahut kuch bata dia hai risk management ke bary main mery khial sy agar hum aik is risk management ke rules ko follow kar lein tu atleast 80 percet trading main hum win kar sakty hain lekin masla yeh hai keh hum isko follow nahi karty hain humien baqaida money management ke rules ko follow karty huwe work karna chahiye hamesha 2 percent risk hona chahiye hamari total investment ke

[Sunriser1]

Risk management ko bohat important consider kiya jata hai lakin main bilkul bhi isko seriously nahi leta pata nahi muje kia ho jata hai main rules ko bhi follow nahi kar pata aor na he main forex main proper tools ko use karta hon i think isi liye main successful nahi hon.

[Akhterp]

Forex trading main lazmi hai ap proper money and risk managment ko follow karen in order to earn huge profit kyun kay forex main ap ney apna trading style khud sochna hai aor dekhna hai ap ney kaisay work karna hai is main is liye kabhi bhi apko risk managament kay baghair work nahi karna chahiye.

[Dexter]

Hello brother one of skill of rusk management is to calculate how many pips that your capital could handle if your trade gone wrong way depending how many trades you enter . Thus you know where your stop loss should be

[Abniali05]

thanks to make this thread because with this is can remembering me to trading with good conditions and make good management for trading with rule of trading i mak. with displine i must trading with good low emotions.

Yes my dear the forum is really fill with a lot of good things thats why everyone here to gain some knowledge about the forex and also to practice some good habits of making good progress in the trading and that's all from me so always try to learn as much as you can from anywhere you want.

[zahidali]

G dekha jay tu har busness ma risk lazmi hota ha magar online trading ma thora zayda hota trading ma magr huma risk ak sath he trading karna ka alag he maza ha jesa hum acha profit bhe nikhal sakhta hain or kafi lose bhe kar bethata hain

[billyboy00007]

Forex trading main apko money management and risk management kar kay he trading karni parti hai ap agar apni marzi kartay hein to likhwa lein apkay account direct wash ho jayen gein to kabhi bhi aesa na karen.

[afzalali]

Risk Management in Forex Trading

forex me Risk management karna boht aham hay is lye k ye business risky hone k sath sirf chand mnto me paise wash kar skta hay aur ye sirf kuch pal me account wash kar skta ha is lye forex trading me aghaaz se hi money management karni boht zarori hay ta k account bilkul safe rahey..

[Dicar]

Jee han bhai risk management bohot important hey Forex trading market men kiyu ke without risk management ko learn kiye hum forex trading market men profit nahi kar sakty or agar hum trading karty huwy risk management ko follow nahi karen gey to hamen sirf loss hi hoga forex trading men.

[zulfiqar5564]

forex trading business need attention , and forex business is high risky business , trader understand the risk management, trader do not use high volume lots in trading account, trader always understand the forex market right risk management rules , trader understand the profitable and good methods of risk management and work carefully in trading market and make profitable trading.