What is your risk management plan?

[EURUSD]

I don't have special risk management but I only used Stop Loss because the most important in risk management planning is setting it well. In my system, I prefer to use fixed stop loss so it will be easier to manage and I can know my performance easier when I used fixed risk management. I used risk reward ratio in order to have good result with current stop loss ratio setting. Currently, I used risk reward ratio 1:2 and I set Stop Loss 30-50 pips (depending on pairs) as risk management.

 

[John Mason]

I don't have special risk management but I only used Stop Loss because the most important in risk management planning is setting it well. In my system, I prefer to use fixed stop loss so it will be easier to manage and I can know my performance easier when I used fixed risk management. I used risk reward ratio in order to have good result with current stop loss ratio setting. Currently, I used risk reward ratio 1:2 and I set Stop Loss 30-50 pips (depending on pairs) as risk management.

Yes, It is good to setup a Stop Loss of more than 30 pips because we all know that markets will have Retracements at any time and that can cause us to get more losses instead of the profits

 

[iMusingKiMi]

Yes, It is good to setup a Stop Loss of more than 30 pips because we all know that markets will have Retracements at any time and that can cause us to get more losses instead of the profits

But I prefer to set my SL below 30 as if you are using 1:2, you need almost 60 of profit to consider healthy. But if let's say setting at 50 pips, it might be consider as 2-3 days trading, otherwise it is hard for you to earn 100 pips on majors on a single day.

 

[elena sarkees]

trading with 2.5% of your total funds is the way to do it i have been using this strategy for 5 years now and it is working very well i also tried this strategy in poker and also workedout just as good so if you guys are new dont risk a lot try to trade with 2.5-5 % of your total amount .

 

[EuroTrader]

trading with 2.5% of your total funds is the way to do it i have been using this strategy for 5 years now and it is working very well i also tried this strategy in poker and also workedout just as good so if you guys are new dont risk a lot try to trade with 2.5-5 % of your total amount .

If we will take less than 5% of the Trading funds at any given time then we will have ample amount of trading opportunities with us.

And we must always realize this fact that in the trading business it is the opportunities that count

 

[EURUSD]

Yes, It is good to setup a Stop Loss of more than 30 pips because we all know that markets will have Retracements at any time and that can cause us to get more losses instead of the profits

The most important is not only setting Stop Loss in how many pips but the right place to set it because mostly pairs will move more than 90 pips daily especially if you're using major pairs. So, it's not only setting more than 30 pips but you must place it correctly too so it won't be hitted easily. And also, using risk reward ratio with Target Profit which is not hard to reach too.

 

[Aaron Dias]

The most important is not only setting Stop Loss in how many pips but the right place to set it because mostly pairs will move more than 90 pips daily especially if you're using major pairs. So, it's not only setting more than 30 pips but you must place it correctly too so it won't be hitted easily. And also, using risk reward ratio with Target Profit which is not hard to reach too.

Yes this happens many times when we face a trade is getting closed due to a Stop loss and so we have to place them in such a way that they will not hinder with our trading at all.

 

[ForexVerified]

Hi there. I would like to know and read some thoughts about your risk management plan so that I could improve mine. what do you think about using pips when thinking about risk:reward? And what do you think is the "perfect" risk management?

Basically, reward should always be higher than risk (2:1, 3:1) so one loss couldn't damage your gains and one gain could cover few losses. But this doesn't have to be a strict rule (you may also use 1:1 but in this case you'd need a higher win rate to be profitable), also you can close certain trades before they reach stop loss or take profit if your system tells you there'll be changes. But usually having a reward/risk 2:1 or higher is best since you'll mostly wait for the "good" trades.

 

[Aaron Dias]

Basically, reward should always be higher than risk (2:1, 3:1) so one loss couldn't damage your gains and one gain could cover few losses. But this doesn't have to be a strict rule (you may also use 1:1 but in this case you'd need a higher win rate to be profitable), also you can close certain trades before they reach stop loss or take profit if your system tells you there'll be changes. But usually having a reward/risk 2:1 or higher is best since you'll mostly wait for the "good" trades.

The Risk reward ratios that we have to understand will always have an effect on our trading and we must know about them so that we are able to use the correct Inputs into our trading.

 

[EURUSD]

Yes this happens many times when we face a trade is getting closed due to a Stop loss and so we have to place them in such a way that they will not hinder with our trading at all.

It's important for traders to place stop loss correctly because stop loss will be useless as risk management plan if you don't know how to place it correctly. If stop loss is easy to be hitted many times then it will be useless for traders to have stop loss as risk management plan. Beside capability to place stop loss correctly, traders must capable to maximize profit to recover the loss.