How Do You Deal with Risk? - Strategies to Help Manage Risk

How Do You Manage Risk? - How Do I Manage Risk?

Understand Price Movement

The first thing when it comes to managing risk is to understand price movement. The price movement of instrument that you are trading will determine your strategy. Choosing a instrument to trade should be based on how well you understand the price movement of that forex instrument as a trader.

Trade with the Trend

When trading always try to find the direction of the trend - and once you find the direction of the trend always open trades in the direction of the trend. In trading once prices start to move in one direction the prices can move in that direction for quite some time in what is known as a trend. Therefore, most traders will look for trend & only open trades in the direction of the trends.

Use Money Management Rules

Using money management rules in forex will help traders come up with a strategy of how they will manage the trading capital in their account.

Forex money management rules will specify the amount of money that a trader will risk per trade. If a trade moves against a trader by a particular number of pips then the management guidelines will specify when to close the open trade.

Forex money management will also specify when to close profitable trades so that a trader can lock in their profits once a trade moves in their direction.

How Do You Deal with Risk? - How Do I Manage Risk? - How Do I Manage Risk? - How to Manage Risk - Strategies to Help Manage Risk