Risk in Trading

[FXO_trader]

You're absolutely correct. While stop-loss orders are crucial risk management tools that help limit potential losses, they are just one component of a comprehensive trading strategy. Without a profitable trading strategy that incorporates proper risk management, relying solely on stop-loss orders may not be sufficient to ensure long-term success.

The risk of trades must be limited in order not to lose profits. It is important before entering a trade to clearly understand what the reasons for entering are (and whether there are any) and how much you are willing to lose in case of failure.

 

[Elektra-Greene]

If you use a high leverage, you can reduce the amount of capital you put at risk

 

[tamaa]

it was a standard back in the day to simply risk as much as 2% of you account on each trade, that way it gives you almost 50 chances of failure before you blow the account (wins not included) thats a good start, but personally i can go as high as 10% i dont mind really but only if im certain to an extent.

 

[FXO_trader]

If you use a high leverage, you can reduce the amount of capital you put at risk

Certainly. Trading with high leverage is a huge risk. My broker has the ability to trade with a leverage of 1:1000, but I only use a leverage of 1:50 or sometimes 1:100, which is enough for me. It all depends on your trading strategy.

 

[Blue_reyes]

Risk is not using stop loss I believe

 

[stoch]

Absolutely, risk management is paramount in trading. Before entering a trade, I always define my reasons for entering, set clear profit targets, and determine my stop-loss levels to limit potential losses. This approach helps me maintain discipline and protect my profits while navigating the uncertainties of the market.

The risk of trades must be limited in order not to lose profits. It is important before entering a trade to clearly understand what the reasons for entering are (and whether there are any) and how much you are willing to lose in case of failure.

 

[Antho]

Risk is not using stop loss I believe

Completely agree. Not using a stop loss is a huge risk and can lead to significant losses.

 

[kajalnigam]

According to me, manage risk in Forex trading by using stop-loss orders, setting a maximum risk per trade (e.g., 1-2% of your capital)

 

[N_Chandel89]

Trading is risky, you have to be disciplined and consistent to overcome that risk. Using stoploss is one of the important thing to do to avoid risk

 

[stoch]

According to me, manage risk in Forex trading by using stop-loss orders, setting a maximum risk per trade (e.g., 1-2% of your capital)

Why did you choose 1-2%. I currently use 3% with HFM and pretty comfortable with it. Blind approach to understanding your risk tolerance is not advisable because it can either limit your gains or lead to excessive losses