Tips for Limiting Trading Losses
Trading has a very high risk limit. This makes many traders who experience failure in trading and even get MC (Margin Call). Loss doesn't matter who it's for, because losses can happen to all traders even though they are professionals in trading. There are several tips that traders can apply in limiting losses, namely:
1. Cut Loss
Cut loss is the action of closing a trader's position against the movement of market prices. Cut loss is used to limit the losses experienced so that they do not cause even greater losses.
2. Switch
The switching strategy is to change direction by closing a losing position and then opening a new position in the opposite direction from the closed position, with the hope that the profit from the second position will be greater than the loss in the first closed position. There are several things that must be considered by traders, namely traders need to make a switch by opening a second position that is opposite to the position that was first opened. This is done if the trader predicts that the profit from opening a new position will exceed the loss from the first position. Second, when switching, it is better when a big trend begins to form.
3.Averaging
Averaging in trading is a trader's activity to open a new trading position when he already has one or more positive floating positions. If the traders are successful in carrying out this technique, then the results obtained in each trade can be very large. However, this technique also has a very high risk. Averaging is taken when the trader believes that the price will return to its original prediction. This means that when traders predict prices will go up, they actually go down, and traders still predict prices will go up, then what traders do is averaging. So that when the price returns to the first buy position, the trader already feels the profit.
Watch the video below if you don't understand this article!
Comments
Post a Comment