Risk Management in Forex

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Risk Management In Forex

• Platinum Trading Institute

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Risk Management in Forex

• Risk management has a lot of importance in forex
  trading.
• It could either lead to the survival or death of
  the trading.
• Risk management includes certain measures for
  containing loss in trading. The measures could
  become downsizing the quantity of trading,
  introduction of hedging, or trading only during
  certain hours or days in a month, or knowing in
  advance about the losses.

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Forex Risk management- Why important?

• Proper risk management teaches the trader the
  intricate art of survival.
• Although brokers always encourage the traders to
  take large risks and earn large gains, such
  prompting simply diverts the traders attention
  from the inherent risks of trading.

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Exercise control over losses

• Exercising control over losses is certainly a
  wise step.
• Make use of correct lot sizes The brokers
  advertisement might make the trader think that it
  is possible to open an account with 300 balance
  and make use of 200 1 leverage in order to open
  mini lot trades of 10,000 dollars that would
  bring the trader just double the money in return
  in a single Forex Trade US. But this could become
  utterly delusive. The reason is trading does not
  have any formula that would work in this magical
  way. 

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Know the overall exposure

• Although using smaller lots is important, it
  would not even help when you have too many
  smaller lots.
• To add to it correlations between important
  currency pairs carries more weight.
• To reduce risk learn more about risk management
  at Platinum Trading Institute.
• When a trader falls short of EUR/USD and goes
  long on USD/CHF, he/she gets the exposure twice
  to the USD and goes in this direction. But it
  comes to using USD twice and when the value of
  USD falls, it doubles the loss of trader. 

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Thank You.