A simple Risk Management can avoid your unnecessarily losses.
“Risk management” is a term that is bounced around the world of Forex trading regularly, but many traders simply don’t understand the sheer importance of it.
No matter whether you’re trading with £100 in the bank or a £10,000 budget, risk management procedures and processes are crucial to ensuring that you remain protected and in control when Forex trading.
The reality is that risk management (along with risk awareness) should already be built into the foundation of your trading approach.
However, what can really work to solidify matters are the tools you can implement along the way that will protect you from taking a heavy financial hit should things go south.
Looking at the tools that most experienced traders lean on, stop-loss orders are what allow you to restrict the amount you can lose, with it closing the position at a preset loss level.
The statistics prove that no trader gets it right every time, as a study by PhD researcher John Forman revealed that 99.6 percent of retail Forex traders are unable to achieve more than four back-to-back profitable quarters.
With this in mind, you need to address risk management extensively so that when losses do occur, they don’t trigger a domino effect.