| The Forex market is highly lucrative battle ground | | | | - Don't chase your losses: |
| where traders fight for money and when money is | | | | All traders including yours truly have had losses at |
| made, money is lost too. However what makes | | | | some point or another but smart traders only chase |
| trading currencies different than gambling at a casino | | | | profit and once have had a bad experience with a |
| is the ability for hardworking individuals who spend | | | | certain instrument, it remains neutral to him and he |
| their time tracking the news, analyzing and managing | | | | moves on chasing profit unlike many traders who |
| their risks in trades to take full control of their | | | | take the casino approach and pump more money into |
| investments and have stable large returns. In this | | | | a losing trade trying to compensate for their losses. |
| article I will give you a few tips to help you manage | | | | When it is time to move on it is time to move on. |
| your risk when trading on the Forex market. | | | | Never chase your losses. |
| - Stop loss and Take profit orders: | | | | - Take control of your leverage: |
| Most Forex brokers offer a stop loss and take profit | | | | Not all brokers allow you to adjust your leverage |
| orders which can be used to manage the Risk | | | | however adjusting leverage is a great way of |
| reward ratio. Set your stop loss according to how | | | | managing your risk to learn more about leverage you |
| much are you willing to risk on every trade I | | | | can read my article Leverage - A Gift or a Curse. |
| personally never risk more than 0.85% of my funds | | | | - Diversify your portfolio: |
| in one trade hence my stop loss orders are always | | | | Always look for new instruments to trade with the |
| set accordingly. Don't set stop loss orders too low | | | | more you diversify your trades the less risks you |
| otherwise your position might close with the usual | | | | may have face. Use a broker that offers more |
| small ups and downs in the currency pair price. | | | | instruments like futures, stocks, ETFs, options, bonds, |
| Always set your take profit orders with reasonable | | | | CFDs or mutual funds. |
| profits or you might end up passing the awaited up | | | | - How to do it right? |
| down movement in the position and start making | | | | Set a risk reward ratio, I personally use 1:3 ratio so |
| losses. Monitor volatility in the market at all times and | | | | for example on a trade that I set my take profit to |
| make sure to adjust both orders accordingly. | | | | $3000 I set my stop loss to $1000. I personally |
| - Trading similar instruments: | | | | recommend this ratio as it is a balanced ratio. |
| Avoid holding positions on currencies that tend to | | | | Unlike many others Traders who chose to control |
| move together in the same direction for example the | | | | their risk and rewards are most likely to stand a |
| pairs EUR/USD and GBP/USD tend to move together | | | | chance against bad days in the markets by taking |
| in the same direction hence I avoid having positions | | | | control of their trades and make profits on a risky |
| opened on both unless I have a urging fundamental | | | | market like Forex. |
| or technical indication to act otherwise. | | | | |