When trading, a Forex investor can multiply capital, and the risks to loose not only potential earnings, but the invested money as well. The deviation from an average expected yield determines the investor’s risk in the financial market. This kind of deviation can bring high profit as well as great loss.
Financial risk management does not guarantee a successful trading, but assembles important parts of it. Every currency operation is a risk. That is why usage of general management methods decreases potential losses.
1. Stop order setting;
2. Capital share investment;
3. Trend trading;
4. Emotion control.
Risk management methods are used after positions are opened. The main risk management method is an order setting that restrains losses. Stop loss (literally means to stop losses) – is a point where trader goes off the market to avoid a disastrous situation. You have to set a stop loss when opening positions for preventing losses. There are several types of stop signals:
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