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Understanding Risk Management to Protect Your Account

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Online trading, whether Forex, CFDs or Futures, is exciting but it’s all about speculation and comes with risks similar to other markets, and as such requires the same precautions that apply in any speculative market. Risk can be mitigated using the proper tools, money management and sound trading practices. CFD and Forex Trading is based on leverage which ramps up your profits but also your losses.

The old adage of investing is applicable to all assets traded online: Do not invest any amount unless you are fully prepared to lose that amount. Recognize that all traders sometimes find themselves on the wrong side of a trade. Different traders might handle the situation in different ways, but they all must maintain discipline and strive to overcome emotion in their trades. After all, nobody wants to exit a trade at a loss, and most traders would emotionally prefer to stay in a losing trade, hoping that the market will turn around and prove that they were right, after all.

The most important step in risk management is controlling your losses. Understanding profit and loss tolerance is key. Figuring out where to set your stop loss is a science all to itself, but the main thing is, it has to be in a way that reasonably limits your risk on a trade and makes good sense to you. Once your stop loss is set in your head, or on your trading platform, stick with it. It is easy to fall into the trap of moving your stop loss farther and farther out.

In this webinar, we will look at some of the key principles to employee in risk management and how these can help you make better trades, keep more pips and lower your exposure.

John Roman
John is an active trader and educator at Investors Trading Academy with an MBA in Finance from New York University.  He began trading in 1995 focusing mainly on commodities and options, then transformed into forex investment. His current specialization covers all aspects of forex trading utilizing fundamental and technical analysis, namely chart pattern analysis. Mr. Roman has conducted training seminars on all over the world from novice to innovative strategies.  He provides a solid, collaborative and extremely encouraging training atmosphere to assist Forex traders in locating and trading momentum moves, using confirmed patterns and methods.
Understanding Risk Management to Protect Your Account
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