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Thread: How to Manage Risk while Forex Trading

  1. #61
    fxkaldi is offline Recruit
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    A very important lesson but overlooked by so many beginners!
    Being greedy can finish you quickly in Forex.

  2. #62
    F0r3x123 is offline Recruit
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    Hi,
    Thank you for sharing with us this great post!

  3. #63
    F0r3x123 is offline Recruit
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    One simple rule is: "Plan the trade and trade the plan".

    Do not get too excited when taking some money from market... this is the first step to try to get more money and change the rules of your trading system.

  4. #64
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    Pharaoh is offline Sergeant Major
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    Quote Originally Posted by F0r3x123 View Post
    One simple rule is: "Plan the trade and trade the plan".
    I always went with "Don't Panic!" as the first rule.

    Having a reasonable risk management plan makes not panicking much easier.

  5. #65
    Joh
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    Thks Pharaoh -spot on!


  6. #66
    duderex is offline Private
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    to me, greed is a killer, and the risk management is the key to having better chances of success in Forex

  7. #67
    navyseal is offline Recruit
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    I have lost 2 accounts because the greeding. When I take profit a lot, I tried to trade with hight volume and I thought I had never lost but I got it in one trade and it burned my account with about 100 pips reverse.

    So please think you can get lost everytrade and don't be greed or overloading.

  8. #68
    jishanbdm is offline Recruit
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    Thanks for your tremendous advice. New traders can learn a lot from this post. keep it up.

  9. #69
    Whitesnake is offline Private, 1st Class
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    Irrespective of our speculation skills it is always very much good for the traders to manage their trading risk efficiently by implementing suitable money management policies such as stop loss or hedging so that they do not risk the entire money in their trading account.

  10. #70
    pcbg007 is offline Private, 1st Class
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    Quote Originally Posted by bygolly View Post
    Limit your risk (this was attributed to a posting by the Elliott Wave group, however, I was not able to confirm)

    If you risk 50% – you will wipe out as soon as you have 2 consecutive losing trades – 1 chance in 4

    If you risk 25% – you will wipe out as soon as you have 4 consecutive losing trades – 1 chance in 16

    If you risk 10% – you will wipe out as soon as you have 10 consecutive losing trades – 1 chance in 1024

    If you risk 5% – you will wipe out as soon as you have 20 consecutive losing trades – 1 chance in 1,048,576 (about a million)

    If you risk 2% – you will wipe out as soon as you have 50 consecutive losing trades – 1 chance in 1,125,899,906,842,620 or about a BILLION!

    Somewhere between 2-5% is the maximum amount you can risk

    The average bank trader or hedge fund only risks 1% to 1 ½ % of the account.

    If you can’t be successful trading a micro account, don’t go up to a mini account. Don’t go up to a standard account if you can’t make a micro or mini account work.
    But this chance computation can only be true if every factor that's causing price movement is fair and not weighted(not manipulated).

    Unfortunately, even the '1 chance in 1,048,576 to lose 20 consecutive trades' is happening to traders having accounts with some unscrupulous brokers using VDP and its equivalent.

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