help me with understanding risk management

[AayushiShah]

Individual actions that traders can take to protect themselves against the downside of trade are referred to as forex risk management. More risk means a greater chance of large returns – but also a greater chance of large losses. As a result, being able to manage risk levels to minimize loss while maximizing gains is a critical skill for any trader to possess.

 

[mimini]

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

you should risk just a few percent per trade

 

[oakum]

In the simplest terms, I can explain risk management as the way of using your funds in a way that the trade outcomes don’t affect you much, no matter whether you have made a loss or a profit. You are prepared for both of these and keep trading in the market.

 

[Tomfoolery]

The best risk management strategy I can share is don’t risk more than 2% of your total trading capital per trade.

 

[Charles Agustin]

The way a trader usually manages his risk is known as risk management policy. What are the ways? - is a question. Different traders have different ways like some reduces lot size and trade in low spread-consuming pairs. Some avoid trading during any news occurs and these all are taken as risk management policy.

 

[whois]

Risk management is easily understanded when you backtest. Once you backtest, you will realize the importance of risking 1%, and you'll trust yourself to risk that and nothing more.

 

[Talisman]

Risk management is all about identifying trading opportunities, analysing the market, and accepting trading results whatever they are. Try to educate yourself about forex trading through live trading on a micro account. Determine emotions that come to you when you have put your money at risk and find ways to deal with them.

 

[fartkontrol]

Risk management is essentially when you calculate the risks you’re about to take and see if it’s worth it to take them. Don’t take unnecessary risks simply because it seems like it’ll bring you a high profit.

 

[blessing fx 99]

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

Nicee bro, thank you!

 

[blessing fx 99]

In the simplest terms, I can explain risk management as the way of using your funds in a way that the trade outcomes don’t affect you much, no matter whether you have made a loss or a profit. You are prepared for both of these and keep trading in the market.

Risk management is usually done by traders by having daily loss limits and daily profit targets

 

[Quirky]

Risks are unavoidable but they can be managed if you want. Take a few trades to see what the live market can do to your trading account. Analyse your trades to see what you could have done to save your account and do that the next time you are trading.

 

[Ricter]

Well, it's fairly simple to comprehend. It's essentially the management of your finances and strategies to ensure that you aren’t at the losing end when it comes to your profit, and rather, are gaining money. My personal risk management strategy is to not risk more than 2-3% at a time.

 

[Screen_Master]

Dont worry we have all been through the lessons of the markets!

 

[Supercilious]

Risk management is a plan that you build for yourself so that you don’t go beyond your risk appetite. It’s meant to show you the way in a fast-moving forex market that keeps challenging you financially and mentally. It helps you in not getting carried away with the market and doing only what is necessary.

 

[destriero]

Your success is determined not only by your profits but also by your losses. While you're focused on producing money, don't overlook the need of safeguarding your account. You must take reasonable risks based on your analysis and risk management plan in order to avoid incurring a loss that you cannot afford.

 

[Cervicorn]

Risk management is referred to the management of risks to minimise losses. Risk management is very important, else you may lose the trade. Also, you need to practise risk management in a demo account for a better understanding. Always risk the amount you can afford to lose.

 

[imanu01]

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.

this seems to be the trick with forex

 

[pippin]

Basically bet size is a function of probability of a trade going in your favour. If you use fixed lot size then both high and low probability trades have same impact on your equity thus averaging returns. Another question is how to calculate probabilities, this can be very subjective but the core concept of risk management is this.

 

[Manometer]

Okay, it is how you can handle and minimise the risk in your trades so you can be on the safer side of the market while trading. There are some techniques to minimise the risk like revising your risk-reward ratio or using stop loss works the best.

 

[Remiform]

Risk management is the best way of minimising the risks. The forex market being highly volatile makes it mandatory to use risk managements like stop-loss or trailing stop-loss. Traders also prefer placing limit orders to avoid slippage which is also the result of volatility in the market.