Risk Management

Risk and trade management is often one of the most overlooked aspects of trading and investing and potentially one of the most important. In this section we look at various aspects of risk and trade management in more detail and produce articles that should allow traders to improve their trading strategies and plans by a much better use of risk management techniques.

Trade and risk management includes primarily what a trader does after entering a trade to maximise prospective profits and minimise potential losses. However, it can also be applied to decisions made before the trade is even executed, as to whether the trade is a good candidate to even enter. Read other articles in our free forex education.


Beginner

“Defense”…The Key To Success in Fx Trading

You’ve heard the phrase “ Defense wins Championships”. Let me tell you why these three words can save your career as a FX trader.  Why become another statistic whose bad decisions cost them the passion of their life. The best and most successful traders adhere to these basics tenets: cut your losses, let your winners … Continued

Intermediate

Is Risk Management Really Important When Trading?

Yes, of course. Why wouldn’t it be? If you fail to respect risk, you will have a very short trading career. “Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones. Paul Tudor Jones couldn’t have said it any better, as a trader risk management is key to any successful … Continued

Beginner

Basic Terms

Below we introduce some initial basic terms from Risk Management. Hit Rate Hit Rate is a measure of the ratio of the number of winning (profitable) trades over a set period of time, divided by the total number of trades. Hit Rate = number of winning (profitable) trades / total number of trades Example: A … Continued

Expert

Traders: On Avoiding the 90-90-90 Scenario

You don’t want to be a part of THAT club… the 90% of retail traders who lose 90% of their money in 90 days. You can avoid it but you have to think differently than the crowd. First, realize that you are not in this business to trade; you are in it to make money. … Continued

Beginner

Why EAs Are Out and ATs Are In…

There are many reasons traders are switching from EAs(Expert Advisors) to ATs (Automation Tools). The primary reason is that EAs cannot put things into context, which is why they had no chance of catching the recent volatile moves in the financial markets. Further, the lack of support is a big problem. EAs are generally just … Continued