Trading Risk Management

Trading Risk Management : As with other industries, investing in online forex trading (FOT) is also a risk that ultimately manifests itself in the form of the potential loss. However, the most interesting part of this business that the risk level has been established at the outset so that potential losses, the amount of potential damage will occur. Arrangement know it can be done (FOT) by activating the facility Stop Loss (stop loss) and blocking (lock loss / gain).

Also, the policy trade margin should be to minimize risk and to take full advantage. Therefore, when the capital reduction and the brokerage firm made a margin call. If not, take advantage of every opportunity that should not put additional capital in order to avoid further losses.

Risk Management frequent use
Cut loss
An action in which. Liquidation of positions at a loss This is done to prevent further damage. Generally, this is done in case of a loss in the range from 30 points to 50 points loss.
For example:
Open buy GBP / USD 1.8850, 1 lot.
It turned out the price moves down. To avoid more losses, the GBP / USD reached GBP / USD 1.8820, we direct the liquidation of these positions (close sell) with 30-point loss (GBP / USD 1.8850 - GBP / USD 1.8820).

Switching
Action where we do first liquidation of positions, then get back with the opposite position from the first position just now.

For example:
Open buy GPB / USD 1.8550, 1 lot.
Once the price moves into GPB / USD 1.8840, we liquidation of these positions (close sell).
Then, we open sell on GPB / USD 1.8840. In this situation we have already suffered losses of 10 points (GPB / USD 1.8850 - GPB / USD 1.8840), but we still have the possibility of sell open position profitable.

Locking
This action is often done when we in profitloss floating. To minimize the loss of greater than or maintain profitability, we balance the loss or gain of a position contrary to the first position. This system is often referred to hedging position.

For example:
Open buy GPB / USD 1.8550, 1 lot.
This is the first position. At the same time, we do open sell GBP / USD 1.8845, as the second position. If then the price towards GPB / USD 1.8820, and we do the second liquidation of our open positions, the first position we lost 30 points (GPB / USD 1.8850 - GPB / USD 1.8820), while the second position we gained 25 points (GPB / USD 1.8845 - GPB / USD 1.8820). In nett, we just lost 5 points (30 points - 25 points).

Averaging
A position to repeat the same action upon us in a floating loss, in which the first position left open.

For example:
Open buy GPB / USD 1.8850 1 lot,
At the moment we open price drops again to open a buy position at the price of GPB / USD 1.8800.
Time the price rose to GPB / USD 1.8900 second we can liquidate the position. Thus, the distribution of capital - our flat is GPB / USD 1.8825 (GPB / USD 1.8850 + GPB / USD 1.8800 / 2). 're Closing price we got was GPB / USD 1.8900, up, blatant profit total 75 points (GPB / USD 1.8900 - GPB / USD 1.8825).

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