Forex trading risk management

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The most important rule for investing is risk management. When not doing it right, too big and powerful banks with hundreds of years of experience can collapse overnight as we have seen the global financial crisis. Big companies have collapsed because of the risk management is not true.

The first rule always is each investor.

No traders with money intended for food, taxes, or anything else. That is money used for trade is money that if you lose the whole process will not affect your normal life. What will you eat you will not lack money to pay taxes and so forth.

If you do not have $ 1,000 to open account open account $ 500. If you do not have extra $ 500 will open a $ 100 bill. If you do not have $ 100 will trade in his blood Uttiahas it like it's real money.

The second rule - your part of the fund would lose parts per transaction maximum of one.

Generally acceptable to stop Los maximum 5 percent of usually 2 percent when talking about a 10 000 dollar bills. Smaller accounts can increase this course a little.

What this means for those who gives a limit of 2 percent - that he needs to lose about 50 transactions in succession to his account will be deleted! Very low probability that those who trade.

For example, if we work on the euro-dollar (where pips round in dollars) and was told that I have an account of $ 1,000 and I am willing to risk 5 percent of the deal it's $ 50 in our case. If for example I want to open a transaction with a pockmarked of 50 pips so I'm going to work leveraging of Lot 0.1 U.S. $ each pip it. Fifty pips give me 50 dollars. If my example Ahstoplus is 100 pips, I will work leverage of 0.05 Lot mini account it's possible. If it's my Ahstoplus 500 pips I will work with 0.01 Lot $ 50 it comes out. If my stop is 550 pips, for example a deal that is right for me by Risk Management and I left out.

The third rule - a risk with profit

Like no one will pay 100 shekels lottery to earn 100 shekels so we will act.

Several methods have generally assumed profits to enter transactions customary profit risk ratio is 1:2

Above. I mean you're risking $ 100 to earn $ 200.

So even if you lose half your transactions and still remain zeroed fund losses.

Rule Wednesday - the realization of profits and setting profit targets.

There are several types of transaction management. One says that when the solid shapes arrival profit equal to your stop just 50 percent of the deal. So I took out the fund.

And if you can move the stop sign - so the pressure off the worst will not gain or lose.

Rule Five - self-discipline

The most important rule that I think there are several groups that discipline inherent in a professional troop, anxious, and athletes. Usually they have a strong self-discipline. And they have greater success Siachwem forex market. Who is no better discipline and do not enter the market with money and things more useful.

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