Some Tips In Risk Management ~ reviews of forex trading platforms
Traders would have experienced very concerned at the risk management. Rick Wright, trader and instructor at Online Trading Academy considers risk management as a holy grail is indeed in trading. Of trading experience, and from a wide range of questions and input when it is taught, it renders some tips on using risk management as presented in this article.
Suppose you have a method and a trading strategy that you believe the holy grail in trading, and trading on one occasion, you are dealing with market conditions so perfect for strategy holy grail of your. Well, if you are going to enter the market with risking the entire capital in your trading account? This is where the use of risk management factors proportional effect. You should have held to apply risk management to fascinated dan proporsional. Here are some tips from Rick Wright that you can consider.
Tips 1 : The amount of risk per trade between 0. 5 % to 2 % of the account balance
If the size of your trading account is $ 10,000, then the risk per trade is $ 50 to $ 200. The reason is if it turns out you will experience a loss in a row, you will not be fast hit a margin call, and will still have a chance to earn a profit next.
Tips 2 : The number of trading positions at the same time not more than 4
If substantial risk per trade 2 % of the account balance, and you are using 200:1 leverage. with eg 40 positions open at once, meaning you have staked the whole trading account At. Even if you are an aggressive trader, trading off as it was very reckless and overly emotional. You are very likely to have difficulty in managing your trade. It is recommended that at the same time do not open more than 4 positions.
Tips 3 : Determine the frequency of trades per day, per week or per month.
Depend on your trading style, it is recommended that you determine the frequency of your trade in a day, a week or a month. This data will you need when making trading journal plan (trading plan) for evaluation.
Tips 4 : Minimize position size (lot size per trade) when trading against the trend
If you are a trader or a swing traders medium term commonly refers to the chart daily to the main trend, but look at the time frame trading opportunities 15 minutes with trend the opposite, you can enter the position size when half of your trading lot size the main trend. If you use the rule accounts for 2 % of trading on major trends, You can apply the 1 % for the opposite trend.
The reason is simple : You certainly do not expect a big profit to trade in the opposite the main trend, so it would be safer if you are a little more risk in order to anticipate if the trend on the lower time frames reversed. Usually traders use the Such trading is happening when a strong retracement of the main trend. Level target small profit, as well as the level of risk.
Tips 5 : To determine the percentage of risk per day or per week
Your trading account is $ 10,000, a 2% risk per trade, would you open a trading position 20 in a day? Or trading position of the week 20? If your entire loss trading position, then You will experience a loss of $ 200 x 20 = $ 4,000 or 40 % of the total balance of your account.
It is often missed when traders trading plan and only realized after suffered several losses in 2 days, 3 days or a week. Although very relative and depends of your trading strategy, but you should determine the amount of risk per time period trade, for example 5 % per day, or 8 % per week.
Tips 6 : Use a trailing stop or sliding stop loss levels while profit
Experienced traders certainly do. From experience hurt them due to profit who have grasped the fly just like that. If you do not constantly monitor the computer screen, You can use the manual way by sliding the stop loss level if it is in a condition profit, paling tidak ke level breakeven. We recommend that you do early on profit protection did you get.
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