Forex trading is not an easy task. The risks of losing most of your money or completely emptying your account are very high. They increase significantly if not managed. Risk management is a set of measures that includes trading at certain hours, limiting lot sizes, the ability to accept losses, etc.
A trader who plays an uncontrolled game and trades without managing his risks is almost doomed to completely lose all his funds. Risk management is one of the main tasks facing a trader, it allows you to maintain a trading account and stay on the market for as long as possible. Most brokerage houses attract clients by offering them to start trading with a small start-up capital. At the same time, the client receives a large leverage, which allows trading larger amounts than is available on his account. With such tools in their hands, most novice traders do not think at all about how not to lose money and simply do not remember about risk management. The easiest way to manage your risk is to tightly control your losses. Always use stop orders, in case of unfavorable developments, they will not allow your losses to empty the account. Many traders prefer not to place such orders, they independently determine the levels of losses and close the losing positions manually. This approach is acceptable only for experienced players, beginners very often wait and do not rush to make a decision when necessary, this leads to large losses. Do not under any circumstances move the stop order to the unprofitable side. If you are wrong with the price forecast, admit it, do not try to wait out the unfavorable trend. You can only move a stop order in the direction of profit when the price moves in the direction you expect. Calculate the size of the lots you are trading correctly. If a broker offers you 100: 1 leverage and you only have $ 100 in your account, opening a ten lot EURUSD position will almost certainly wipe out your deposit. There are no specific recommendations for the size of the lot, each trader determines it independently, however, for novice traders, this indicator should be as small as possible. The ability to manage risks distinguishes a professional trader from a gambler. This integral part of trading allows you to save money and keep working, concluding more and more new deals.
