Risk Reduction or Risk Management in Forex.

Numerous articles have been written about risk management in forex, but this topic remains relevant. New solutions for reducing losses are constantly emerging.

By using the right approach to trading, you can virtually eliminate the risk of losing your deposit, which is the main danger of forex trading for beginners.

Forex risk management includes the following measures and approaches.

• Volume control - the volume of the opened transaction must correspond to the planned time of its maintenance and market volatility .

For example, if you plan that the transaction will exist only for a couple of minutes ( scalping ), you can take a risk and use a leverage of 1:100, 1:200, if for several hours - 1:50, days 1:10.

At the same time, you should not deviate from the intended plan, the longer you hold a risky position, the higher the risk of losses.

• Risky moments - during price jumps, it is better to refrain from opening transactions, these moments can be determined on M1 by the presence of long candles. That is, the price has covered the maximum distance in a minute, which indicates its high speed.

The rule also applies to the time of significant news releases, trading at this time is also risky. You can determine this very time using the economic calendar .

• Stops should always be - even with short-term trading, it is advisable to always set a stop loss, a five-digit quote allows you to place this order as close to the price as possible. And when opening long-term and medium-term positions, there can be no talk of working without a stop loss.

• Refuse to use advisors - most of them are high-risk and, despite the assurances of the developers, sooner or later drain the deposit. If you are already using a robot for automated trading, take the time to regularly withdraw profits and monitor its operation.

• Unused funds - do not keep excess money in the same account as the deposit for trading; the trader's account should only contain the amount necessary to maintain the transaction, and it is better to transfer the remaining funds to another account or keep them in the trader's office. Such a simple step will prevent you from losing everything in the event of unforeseen circumstances.

You should not think that all risk management in Forex is limited to setting stop losses and trailing stops ; sometimes even these orders do not save, so it is advisable to use the above measures in trading.