Hi Friends! How does one contrl risk in forex trading? What are low risk situations.?
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My clients and I manage risk by utilizing hedging strategies with various correlated currency pairs. This reduces any losses associated with unexpected market swings and also assures receiving a daily interest payment if properly structured.
This method is frowned upon by Forex traders who like to monitor the charts and anticipate short term movements. I coach my clients on how to be Forex investors as opposed to Forex traders.
Paul
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Look like a deeper implication to your questions is about "Trade and Money Management". Relating to position sizing. And how to manage the equity. As a general rule of thumb, your profit limit should be 3 times that of your stop loss. Or else its not worth the effort. Depending on your track record of win/loss ratio. In quatity and monetary terms. The pros have maybe 70/30 win/loss. Peter Bain of Forex mentor has a 70/30 system.Take a look at a video clip here http://www.geocities.com/lcming/forexfor...
Get hold also of Dr Alexander books "Trading for a living" & "Come into my Living room". He explains risk, money mgmt, trade mgmt, position sizing, and Trading Psychology.
1- trade with 10% to 20% of you mony.
2- Enter the market after (good study) by looking carfuly to the chart.
3- put your stop in point that you see if the indecator arrive to it will be go oppsite of you .
4- put your profet befor you put your deal, and take your profet ,and don't wait for more
by these rulles the risk will be under control
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