What is your risk management plan?

[iMusingKiMi]

Different trader has different point of view about how many percentage of equity to risk in each transaction, and general rule as I know, it's safe enough to risk below than 5% in each transaction. But there are some traders who like to risk high in order to gain high return soon, but you must know the risk before doing that so you won't regret your decision and you won't blame forex, strategy or anything when the result didn't same with your expectation.

Even 5% per trade is relatively large to me if you are trading lower timeframe. Imagine that you have 5 losses in a row, have you prepare to loss 25% of your capital? If yes, then you can use 5%.

 

[EuroTrader]

Even 5% per trade is relatively large to me if you are trading lower timeframe. Imagine that you have 5 losses in a row, have you prepare to loss 25% of your capital? If yes, then you can use 5%.

I know that the chances of getting a loss in our trading are very high. This is also a reason why as a Forex traders we need to remain careful and always do such types of trades that can give us a nice trading income

 

[arigoldman]

I recently read a thread about Swing Trading on Babypips by Mastergunner99. It made a lot of sense to me, so I have been demoing his methods.

His main method is to trade lots of different pairs at the same time. He uses price action without any indicators, and uses the closing candle on the daily charts to determine how to trade.

I'm new & decided to use the weekly charts to find trends, then use the daily closing candle to confirm the direction. My FXCM demo only allows me to follow 20 pairs, but MG99 follows 28. Anyway, I bought 1 micro of about 10 different pairs on a $2000 demo. I've been watching them and closing the obvious losers. I've closed about 4, and reopend a few that I realized I'd chosen the wrong direction on.
So far it's doing quite well.

My point is that it's quite easy to close the obvious losers from a list of winners. So, if you are trading a lot of pairs at the same time, in smaller lots, it's pretty easy to do.

As I said, I'm pretty new, so we'll see how it works over time.

Well, you should only trade when you see an opportunity. Sometimes I have 15 positions open, sometimes i have 0. And also, trading based on the closing candle is too restrictive and not reliable. Find your own way, you seem to have what it takes!

 

[iMusingKiMi]

I know that the chances of getting a loss in our trading are very high. This is also a reason why as a Forex traders we need to remain careful and always do such types of trades that can give us a nice trading income

Absolutely yes. It is a long term business because profitable trader use strategy to improve our "EDGE" in trading. It is all about survival game, if you can't survive 20 loss trades in trading, it might be too dangerous for the investment.

 

[kingsman]

in my personal trading , i used to prefer a risk of 10% at one time. I will not open new positions if my current positions are gone above 10% in loss. I will wait to close these with minimum loss and then look for new trades.

 

[ForexVerified]

in my personal trading , i used to prefer a risk of 10% at one time. I will not open new positions if my current positions are gone above 10% in loss. I will wait to close these with minimum loss and then look for new trades.

10% is usually considered high risk, but if your account is small then unfortunately you have to risk more.

 

[iMusingKiMi]

in my personal trading , i used to prefer a risk of 10% at one time. I will not open new positions if my current positions are gone above 10% in loss. I will wait to close these with minimum loss and then look for new trades.

10% is absolutely too high risk of trading for a single trade. If you are running hedge fund, usually 15% of DD are considered as immediate emergency level and 20% are to force closed and considered as fund failure investment. Better start to plan a new money management if you want to survive in the game.

 

[FXFINPROCapital]

Hi all, much more wikihow.com/Develop-a-Risk-Management-Plan

 

[EuroTrader]

10% is usually considered high risk, but if your account is small then unfortunately you have to risk more.

If we will keep our trading risks to the minimum then we will get such types of trading opportunities using which we will get a good and reliable income from the Forex markets

 

[arigoldman]

Always focus on preserving what's yours.