risk management

[VasilTodorov]

use the maximum percentage strategy
do not invest more than 1.5% in each trade
also do not forget and under estimate the stop loss even if you are 100% sure about winning
finally do not trade to revenge
that seems not to relate to risk management but it is definitely one of the best points to stick to

 

[Lee-me]

Don't open too many positions all at once; you may come to a point where you will have to make quick decisions on each one, so be careful with how many positions you open and their size as well.

 

[ArnavDeshmukh]

in my opinion a good strategy is to adjust your position size based on the volatility of the pair you're trading and the distance of your stop loss.

 

[thomassup]

The most important element for managing risk in Forex trading is proper position sizing.

 

[Stoic]

The main principle is positive mathematical expectation.

 

[thomassup]

The main principle is positive mathematical expectation.

Can you clarify on this? It is a bit open ended and I believe it is really important.

 

[CallahanSinclair]

I think the other good risk management strategy is rule %1. It protects our investment.

 

[RahmanSL]

What are some effective strategies for managing risk in Forex trading?

Treat your trading account like money in the bank and as an investment.
Reasearch your target trading pairs and only trade what you have confidence in.
Have lots of free margin available in your trading account at ALL times.
Don't try ... and even believe .... that you can turn your USD100 trading account into USD1m in matter of a month or months because you are not a Trader but a Gambler.

Keep in mind that even a miniscule 0.1% daily gain equates 26% gains in 52 weeks yearly trade (260 trading days) which no bank in the world would give you for your fixed deposit.

Quite frankly, is it that difficult to make a daily USD5.00 profit on a USD5,000 trading account? Or, as a matter of fact, even USD100.00?

 

[ImogenBeaumont]

I heard and read in the forum about stop-loss and tried to use it.

 

[Komondar]

I heard and read in the forum about stop-loss and tried to use it.

does it work?