Risk Management

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Risk management is one of the most important aspects to successful trading, but is often overlooked. Want to customise a risk management game-plan? paulrobinsonFX outlines factors to consider here: Trading involves risk. Losses can exceed deposits.

Your primary goal should be to find trades which give you an edge and offer an asymmetrical risk profile.

Too many traders, though, get hung up on having a high win percentage, which is understandable to a degree – it’s human nature, people don’t like to lose, but that is part of the game. It is better to have a 35% win rate with a 1:4 R/R ratio, than a 65% win rate with a R/R ratio of 1:1. It is easier to identify quality risk/reward opportunities than it is to be right all the time.

 

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