help me with understanding risk management

[Maschie]

hello am new here i want to have better understanding of what is risk management in trading all about pls

 

[Sherverty]

Risk management is the process of identifying, monitoring, and managing potential risks so as to minimize the negative impact they may have on an organization. A few examples of potential risks are security breaches, data loss, cyber attacks, system failures, and natural disasters.

 

[Frank Rogers]

Risk management refers to the informed decisions that a trader must take to avoid losses while trading.

In forex, you get higher returns as your investment increases, but at the same time, the risk also increases. Therefore, traders must be able to plan and minimise risks.

 

[Ashley Smith]

Forex being a risky business, requires traders to be extra careful about the trading decisions they make. From determining which trade to enter at what time to deciding how much to risk per trade, come under their risk management strategy. It’s like finding a way so that your losses don’t affect you badly and you still have money and strategy to go back into the market.

 

[MbaTha@9385]

hello am new here i want to have better understanding of what is risk management in trading all about pls

I'm also struggling with that

 

[dreamercreamer]

Bro... the only risk management you need is risking 0.75% per a trade making sure they are 5:1 RR and using a strategy thats performs 51% win ratio and trade as close to the markets turning point

 

[Zygosis]

I like to call risk management the art of understanding how much you need to put at risk at a particular time when you trade, what situations you should avoid, and whether or not you should use leverage.

 

[ShihTzu]

If you are finding it difficult to understand risk management through theoretical knowledge, try using a demo account to understand its working. Doing it practically will make it clearer to you rather than only studying about it. However, to get the best of it you have to treat demo account as a real one.

 

[VargaDimwit]

Risk management is a technique that is used while trading in order to avoid unnecessary losses.
There are many risk management tools like stop loss and trailing stop loss.
There are other techniques too that a trader uses to avoid risking unnecessarily.
One should not risk more than he can afford.
Some traders calculate their risk reward ratio and keep it to 1:2 or sometimes1:3.
1:2 risk reward ratio means that a trader avoids a trade where the profits are not double the risk.
1:3 risk reward ratio means that the rewards are three times the risk.

 

[shahzad105]

risk managemet is secure your accout from huge loss with stop loss

 

[shortham]

Never trade with an amount that you can’t afford to lose. I always keep aside some amount from my earnings to trade and forget about it since losses are a routine for us, traders.

 

[antwanmcdonough]

With proper risk management, traders can minimise their losses. A good risk management strategy involves a set of rules and steps that traders should take to prevent losses and maximise gains. Some of the steps to prevent risk are-

1) Setting stop losses and take-profit orders.
2) Having a set of trading rules
3) Allotting a risk-reward ratio
4) Keeping an eye on news
5) Controlling emotions

 

[jamesgarcia]

Risk management is the name given to the process where you set a certain set of rules for yourself about taking risks, using leverage, and deciding an amount to trade with the aim of reducing your losses.

 

[Patrizia Bruno]

Your success doesn’t only depend on the profits you make, but also on the losses you make. While focusing on making profits, don’t overlook the importance of protecting your account. You have to take calculated risks on the basis of your analysis and as per your risk management plan so that you don’t incur a loss that you can’t afford.

 

[Liang Huiqing]

I hope that you know that you will be taking risks every time you trade. But how far you want to go to take a risk is what risk management helps you with.

 

[Psychomancy]

The golden rule of risk management is to never risk more than 1-2% of your trading capital. When you keep your investments affordable, the losses stay affordable.

 

[Aventail]

Risk management allows traders to set rules and precautions that ensures any negative impact of forex trade is manageable.
Risks can be managed by either reducing it or avoiding trade entirely.

 

[Xie Yuanjun]

Portfolio diversification is a great way of managing your risks. You don’t have to put all your eggs in a single basket. Just diversify your investments and divide risk.

 

[sarahgoutvaks]

With proper risk management, traders can minimise their losses. A good risk management strategy involves a set of rules and steps that traders should take to prevent losses and maximise gains. Some of the steps to prevent risk are-

1) Setting stop losses and take-profit orders.
2) Having a set of trading rules
3) Allotting a risk-reward ratio
4) Keeping an eye on news
5) Controlling emotions

These are good points a trader can opt for limiting the risks. A trader can also place limit orders to avoid the losses due to slippage.

 

[TerenceDavi]

With proper risk management, traders can minimise their losses. A good risk management strategy involves a set of rules and steps that traders should take to prevent losses and maximise gains. Some of the steps to prevent risk are-

1) Setting stop losses and take-profit orders.
2) Having a set of trading rules
3) Allotting a risk-reward ratio
4) Keeping an eye on news
5) Controlling emotions

These are really good points and traders should use these measures to ensure that any negative impact on the trade can be managed.