What is your risk management plan?

[Bordux]

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?

 

[EURUSD]

In my view, there is no perfect risk management for all traders because every trader has different view about how much amount to risk in each transaction and also how much target of profit to reach in each transaction. Some traders prefer to use risk reward ratio with risk setting is higher than target (example : SL and TP setting = 2:1, 3:1, etc.) with consideration that SL will be harder to reach and trying to win more than losses. Another traders prefer to set profit higher than loss (example : SL and TP = 1:2, 1:3) with consideration that it's still possible to gain profit when win is lower than loss as long as loss ratio is not more than 60%. So, the best risk management is depending on trader's consideration which made them comfortable in trading.

 

[nahiyar]

You are right no plan can be prove perfect as we plan it . There is difference n their results. However we plan for loss and profit but market moves differently . We have to quite trades some times for security of funds. Your above plan is applicable when market is moving according to analysi. Then risk management also works good.

 

[arigoldman]

True that everyone has their own preference. In most books you would read that one should never risk more than 1-5% on a trade. Somehow that stands true for me also. Whatever works for you, really.

 

[iMusingKiMi]

Know your bottom when you are buying, never guess the top.
Know your top when you are selling, never guess the bottom.
Forget about Risk:Rewards, that's text book trading.

 

[Whitesnake]

With regard to the risk:reward ratio for the ideal risk management is something more than 1:2 such that even with lower winning probability traders can be able to survive in the forex trading business.

 

[kemer roach]

Well, I know Forex trading is very risky business. This is way, I am very sincere about money management policy. I never open my trade with more than 2% risk for every single trade. On the other hand, usually I open one trade in each duration. When I get TP or SL then, open my new trade. Thus, I handle my live trading account.

 

[arigoldman]

Cut losses early, let profits run.

 

[iMusingKiMi]

Cut losses early, let profits run.

Very very easy to mentioned, but not a lot of trader can do that.

 

[Froso@FXNET]

Very very easy to mentioned, but not a lot of trader can do that.

You are right , when face the real condition we will hard to implementation . the factor that most dominan are psychology where every individual surely will be different of their psychology .