Risk Management

Risk management is the management of risk inherent in trading by identifying these risks, assessing them and knowing how to control them. You can't control how much you may profit on each trade, but you can control how much you may lose. Poor risk management is one of the top reasons traders fail. Managing your risk exposure, by knowing what to do and what not to do, helps to prevent deep drawdowns or losing your trading capital. There is a variety of potential risks to take into account.

Good risk management is key to capital preservation and involves thinking about how much capital to employ, how much to risk on each trade, how many trades to make daily, weekly and monthly and what stop levels to use for each type of set-up. Also included in good risk management are what reward / risk requirements to enforce, how to employ money management, how to use a balanced portfolio and how to deal with correlations between open trades. Traders employing good risk management also consider what loss limits to set daily, weekly and monthly, how to calculate the overall expectancy of your trading strategy and how to avoid the risk of ruin.
Oztrade Oztrade EURUSD, 240,
EURUSD: CROSS CURRENCY PAIRS CORRELATION - ADVANCED ANALYSIS
16861 39 71
EURUSD, 240
CROSS CURRENCY PAIRS CORRELATION - ADVANCED ANALYSIS

Hi all, I wanted to share this chart with you - I am hoping it works when I publish it and the arrows stay inline with the text - something very interesting we all know about currencies moving in tandem with each other to some degree different economic events causing them to stop moving together but eventually they will again. As a forex trader, if you check ...

a.b a.b PRO EURUSD, 60,
EURUSD: RISK/REWARD vs WIN/LOSS
578 17 53
EURUSD, 60
RISK/REWARD vs WIN/LOSS

A simple matrix correlating RISK/REWARD vs WIN/LOSS ratios. What do you think? Where do you stand? 1, 2, 3 or 4?

Akil_Stokes Akil_Stokes PRO AUDJPY, 240, Short ,
AUDJPY: AUDJPY: 2 Potential Bearish Gartley Formations
945 2 29
AUDJPY, 240 Short
AUDJPY: 2 Potential Bearish Gartley Formations

One of our other less complicated trades from today (not saying that pattern aren't complicated), but what we have here on the AUDJPY are 2 potential bearish Gartley formations, with the smaller of the 2 offering a FANTASTIC risk to reward ratio. The risk reward tool on the chart isn't a representation of my actual stops and targets (for those who like to blindly ...

TomHall TomHall TOP EURUSD, 60,
EURUSD: Pips vs Profit - Which Do You Focus On?
1665 19 63
EURUSD, 60
Pips vs Profit - Which Do You Focus On?

FREQUENTLY ASKED QUESTIONS Q: How much money do I put on per trade? A: I personally adjust my position size depending on the currency pair and stop loss difference to cap my loss at a maximum of 1% Q: How many pips do i look to achieve Daily / Weekly / Monthly. A: I never set percentage or pip goals, this can cause impulsive emotional behaviour which forces you ...

LewisGlasgow LewisGlasgow PRO GBPJPY, 60,
GBPJPY: Tips for Growing a Small Trading Account
3880 68 228
GBPJPY, 60
Tips for Growing a Small Trading Account

Tips for Growing a Small Trading Account Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to provide you with five tips for growing a small trading account! 1. Define your why As you all know 90% of traders fail, it's a well-known fact and it's the main reason why I provide so much free content... ...

LewisGlasgow LewisGlasgow PRO GBPJPY, 60,
GBPJPY: Three Reasons Why Most Traders Fail
1221 1 90
GBPJPY, 60
Three Reasons Why Most Traders Fail

Three Reasons Why Most Traders Fail Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to break down three reasons why most traders fail! Traders Fail?! Yes most do, it is believed over 90% of new traders fail (this is an ongoing debate) but why is that? I personally believe it comes down to ...

david.ayad2012 david.ayad2012 EURAUD, 240, Short ,
EURAUD: euraud short
27 0 5
EURAUD, 240 Short
euraud short

after retest this zone i will go sell we have more 400 pip target so you need to mange your risk .

Taxpayer Taxpayer KOS, D, Long ,
KOS: KOS Long - Risky but high reward
18 0 1
KOS, D Long
KOS Long - Risky but high reward

https://www.tradingview.com/chart/qnlve0aB/ This stock is a little bit risky. However, the huge upside makes it worth a shot. Remember to set correct stop-loss @5.57 (0.5) As always. Target is floating and not set. If the trade is successful, I will close once it hit's SMA200 again.

Tradewonk Tradewonk EURGBP, 240,
EURGBP: When Not To Take A Trade
2444 33 165
EURGBP, 240
When Not To Take A Trade

Every sunday i watch all pairs, draw the strongest fresh supply & demand zones and set the alarm. But do i always take the trade when the price hit the zone?

Tradewonk Tradewonk GBPUSD, D,
GBPUSD: Maximum Drawdown
1763 14 148
GBPUSD, D
Maximum Drawdown

Drawdowns on your account are part of trading but if you establish a trading plan then it will enable you to survive these losses and not wipe out your account.

SignalSwiss SignalSwiss TOP XAUUSD, D,
XAUUSD: PLEASE.....CAUTION!!!
3965 22 145
XAUUSD, D
PLEASE.....CAUTION!!!

Dear Traders, this is not a setup or our typical analysis, but we wanted to post this message because the Geo-Political tensions (Syria, Korea, ...) may increase in the coming days. With that in mind, we urge you to be cautious, and if possible, do not hold open positions during the upcoming long weekend, unless you have a hedging strategy. We maintain our focus ...

Kishore Kishore PRO EURUSD, D,
EURUSD: WHY TRADERS LOSE IN FINANCIAL MARKETS
1056 14 65
EURUSD, D
WHY TRADERS LOSE IN FINANCIAL MARKETS

Why Traders Lose In The Financial Market. Three Important Things To Know Before Trading You may be one of the traders out there, Who has lost plenty of dollars in the financial markets. So in today’s lesson we are going to check the most common trading mistakes a trader does when he starts trading. Knowledge: So the first important accept in losing in the ...

LewisGlasgow LewisGlasgow PRO GBPUSD, 60,
GBPUSD: The Power of Compound Interest
983 18 68
GBPUSD, 60
The Power of Compound Interest

“Compound interest is the eighth wonder of the world. He who understands it, earns it... He who doesn’t... Pays it”. The idea of compound interest is simple, use your profit to make more profit instead of spending it... You can do this whilst making small regular withdrawals! BUT Too many traders try to get-rich-quick and in turn blow their trading account. ...

avidtrader89 avidtrader89 PRO EURCAD, 60,
EURCAD: "Money is made by SITTING, not TRADING" - Jesse Livermore
277 9 23
EURCAD, 60
"Money is made by SITTING, not TRADING" - Jesse Livermore

One of the major reasons why traders lose money is because they ride out their losses and close profitable trades too early. While being patient can help us to achieve our maximum profit potential, being patient on the wrong side of a trade can be costly. This is a great insight into why we are naturally predisposed to riding out losses and not quitting while we ...

LewisGlasgow LewisGlasgow PRO GBPUSD, 60,
GBPUSD: A Simple Lesson in Risk Management
906 14 73
GBPUSD, 60
A Simple Lesson in Risk Management

Utilising a Risk to Reward Ratio How many of you obsess over an 80% profitability rate? You may feel the need to be right all the time and cannot accept a large amount of losing trades. OR You may think in order to become a profitable trader you need to win more than you lose. Well it's time to put that aside. You do not need to have a high profit/loss ratio ...

BenchTeam BenchTeam XBTEUR, 240, Long ,
XBTEUR: Bitcoin / Euro - risk management #1
179 0 2
XBTEUR, 240 Long
Bitcoin / Euro - risk management #1

Hi, This is just a brief description of how I manage my trades. It's important to juggle a few factors in these sort of cases. Firstly, it's best not to mother a trade to much. You need to give it room to breath and keep your stop in a place that isn't going to kick you out to early. If the market is telling you something is potentially wrong, you need to be ...

dravya dravya SPY, 60,
SPY: Educational Series - Part 2
41 0 4
SPY, 60
Educational Series - Part 2

---------- Continued from Educational Series - Part 1 (link below) ; ---------- 3. Expectancy : So, now we have got our risk reward ratio and winrate. We move on to calculate the expectancy of our trading strategy. The formula is, Expectancy = (Probability of Win * Average Win) – (Probability of Loss * Average Loss) So, in our scenario, where, Risk Reward ...

dravya dravya SPY, 60,
SPY: Educational Series - Part 1
40 0 3
SPY, 60
Educational Series - Part 1

NOTE : this post is intended for novice or intermediate traders, professional traders can skip it or read it to refresh what they already know. For the benefit of other traders, I am starting an educational series where i will be covering lots of topics related to trading which everyone should abide by. It will be in simple language and easy explanation so that ...

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