Trading Risk Management
One of the keys to success in learning forex trading is risk management. Traders can claim to have a powerful trading strategy or use reliable analysis, but it's useless if all of that is implemented without risk management. Because without risk management, sooner or later trading traders will fail to achieve profitable results.
In the forex market there is no exact science that can 100% predict price movements correctly. As good as a system is, there must be a potential for prediction errors that can make a trader's trading position lose. Therefore, when learning forex trading, traders must familiarize themselves with the rules of good risk management. Here are some risk management methods that traders can apply in trading:
Stop Loss
Using a stop loss is actually very easy, where traders only need to place a stop order below the buy price or above the price when they want to sell.
Switch
The switching technique is an act of closing the portion of a trader who is losing a cut loss that is contrary to the trader's prediction and then opening a new position following the price that moves against the hope that the trader can make a profit.
Average
The last risk management technique is to use averages. When going to apply this technique, traders will add to the same position at different prices. It is important to have a large amount of capital when applying this technique, but traders will also get a large profit by applying the average technique.
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