remember to never trade money that you cant afford to lose. However, this can make it much easier for you to lose huge amounts of capital too. Following this simple rule gives you structure and a greater chance for the account to survive in the long run and to profit from all market volatility. Lets put some numbers behind the FX market. The tricky part is having enough self-discipline to abide by these risk management rules when the market moves against a position.
Remember, you can have the best trading strategy in the world.
But without proper risk management, you will still blow up your trading account.
Finally, avoid correlated markets. Video: Equity Management in Forex Trading. If you eventually risk money you cant stand to lose and you lose a substantial amount, or even stand the chance of losing it, your decision making gives in and your chances of making mistakes goes. This would mean a 10 pip move against the entry price would wipe out 10 of the trading account. Conclusion The lack of forex risk management is responsible for the dreadful statistics we have mentioned in this article. With the right techniques to manage your money and negate risk, any trading system can become 2009 bitcoins positive and profitable.
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