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Chapter 33, Part I. Risk Management Framework.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Apr 16, 2012.

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  1. Administrator

    Administrator Just Administrator :-)

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    Part I. Risk Management Framework.
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    Commander in Pips: Gradually we are moving to the end of our school and most of the rest of the chapters will be dedicated to different kinds of management and corresponding to trading stuff. Still there will not be a small amount of chapters ahead. Now the time has come to shed some light on risk management. We very often have mentioned this topic with different chapters across the school but never talked about it in detail. Now will try to fill this gap.


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    Pipruit: That’s great. Actually this is one of the main parts in my trading system that demands more clarification.
    Commander in Pips: So, why risk management is so important? First, we intend to deal with a new business – this is trading. When you intend to open, say, a restaurant you will think many times before doing it trying to estimate all possible scenarios and find cases where you have a solid probability to lose money. In other words, when you intend to start something new – you investigate all underwater stones that could lead to a negative result for your start-up.

    The same is with trading. Since we intend to start a business and we want to make money on it – we also have to know how safely avoid unnecessary loss and eliminate possible scenarios where such losses could appear. That is risk management. This topic is crucially important, since saving earned profit is as hard to keep as it was to earn, or even harder.
     
    #1 Administrator, Apr 16, 2012
    Lasted edited by : Oct 9, 2016
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