Dwayne Buzzell Blog | Advanced risk management factors in forex trading | Talkmarkets

Dwayne Buzzell

Forex Trader
Member's Links: Forex Trader

Between 2003 and 2007 I was studying Economy at Berkeley University.

Since 2014 I've been investing in the forex market. It takes me about 2-4 hours daily. I have a lot of experience and I want to share my knowledge.

Advanced risk management factors in forex trading

Date: Friday, April 28, 2017 5:24 AM EDT

Every single day the number of retail traders in the forex trading world is increasing at an exponential rate. In the past trading the financial instrument was only limited to large banks and institution but due to the recent technological advancement, normal people like us can also trade the live asset in the market. But if you look at the success rate in the forex trading industry then you will be shocked to see that only 5 percent of the traders are making money consistently. Most of the novice traders in the forex market loses money in forex trading since they don’t know how to execute their trade with proper risk management factors. So if you truly want to become a professional trader in the forex market then make sure that you learn the advanced way of managing your risk in forex trading. In this article, we will learn the advanced risk management factors in live trading.

2 percent rule: Those who are trading the forex market for a couple of months must know the famous 2 percent rule in the forex trading industry. But we will give you a clear insight of this rule as most us don’t know what the 2 percent rule is. As a professional trader, you should never risk 2 percent of account capital any single trade. But if you take more than one trades then you should reduce the risk exposure in every single trade so that the overall running risk doesn’t exceed the percent of account capital while trading the foreign exchange market.

Trailing stop loss: Trailing stop loss is one of the most profitable ways of managing your risk in the forex market. When you execute any orders in the forex market make move your stop-loss to the breakeven level once the trade goes in favor your direction. All the professional traders in the financial industry ride the long term prevailing trend in the market by using the trailing stop loss features and maximize their profit in the market. But when you use the trailing stop loss features in the market try to use the knowledge of key support and resistance level since it will help you a great deal in placing the trailing stop on the market.

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