Understanding Risk in FOREX

MoneyTec Forums Beginners Forum Understanding Risk in FOREX

This topic contains 7 replies, has 6 voices, and was last updated by  FxTT 1 year ago.

Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • #1028

    zee
    Participant
    • 30

    FOREX trading can be seen as a highly risky business. Though majority of risk can be avoided with precautions, following points must be kept in mind.
    1) Each trader, either beginner or experienced, should always be aware that risk can never be fully avoided in FOREX market.
    2) As a beginner, one must understand fundamental principles of position sizing and always follow them.
    3) A well-chosen hedging strategy can be extremely helpful in minimizing potential risks in FOREX trading.
    4) It can be a good strategy to use stop-loss in order to avoid unnecessary risks.
    5) Leverage is a useful tool but it must never be overused.

    1
    0
    #1352

    Peter Parker
    Participant
    • 29

    Actually, I agree with certain points. I don’t agree with hedging strategy. I believe it is a very complicated thing, and should be best avoided unless you have sufficient experience. Leverage certainly must not be misused, as it is something to help people who got talent but lack cash, it is only through leverage that such people can reach top quicker, but if it’s used for gambling kind of mindset then it will only take us to disasters.

    1
    0
    #1361

    OctaFX_Farid
    Participant
    • 28

    You are right Peter, but not entirely. I agree that hedging MOSTLY is mostly NOT recommendable strategy, especially for beginners. However, if you have experience and sufficient knowledge then hedging is not exactly all that bad.

    You need to keep in mind that hedging is not just ONE strategy; there are several hedging strategies, so maybe something in your mind might not actually be good but there are some epic hedging strategies I have seen applied by experts, and those work like a charm! But anyhow, I overall agree that it’s not exactly favorable.

    0
    0
    #1378

    FxTT
    Member
    • 24

    It is not easy to understand these points unless you trade yourself on demo, at least. Mostly people don’t use demo at all which is just wrong. If we use demo then we will easily be able to figure out things and that will help us with gaining well. I always go with very balance approach in terms of risk/money management, which helps me stay up.

    0
    0
    #1522

    Dr.Infinite
    Participant
    • 22

    Most people say they understand the risk, but I don’t think there are many who really understand the risk. It’s why we see so many people failing.

    If we understand the risk in real terms then we will never lose. So, it is a huge challenge for all to fight out the risk and manage things in the way where profit never stops and losses never affect you. It’s easier to say but it is not easier to do at all.

    0
    0
    #1573

    Zuko
    Participant
    • 14

    After being in the industry for so long, I know how to deal with the risk, but this was not the case from the start. As when I started, I was too impatient and wild. I never liked the idea of holding myself or not taking the risk.

    I was more about taking every bit of risk as long as it gives me chance for big profits. It made me lose plenty and I stopped trading for 6-8 months, before starting again with a much more mature approach.

    0
    0
    #1623

    Zuko
    Participant
    • 14

    I think it is a huge challenge for anyone to truly understand the risk, as there is so much into it that you need to watch.

    It is just not possible for anyone to work out without taking the risk, but if we learn to manage risk well then it will not damage us. Risk needs to be taken, but only in situations when you know that the reward is greater.

    0
    0
    #1644

    FxTT
    Member
    • 24

    Most people are unlikely to understand the risk management of risk and that is because not many focus on this aspect at all. Demo account is ideal place where we can work out these things for our betterment, so if we want to get things working in our favor then we need to bring the use of demo account to our favor, as that is what will make it certain that we are in safe zone.

    0
    0
Viewing 8 posts - 1 through 8 (of 8 total)

You must be logged in to reply to this topic.