DEALING WITH RISK MANAGEMENT for Forex, CFD & Bitcoin Trading

Risk is an essential part of day-to-day trading – without risking capital, you can't achieve any returns. But traders today have a suite of tools to help them control risk as they manage their positions.

In trading, the risk is the potential for your return from trade to be lower than you expected. That could be because you had to close it beneath your profit target, or it could mean losing all the capital you spent on the position.
No trader gets every decision right. So, it's essential to develop a comprehensive plan for managing risk within your trading – especially when using leverage, which will amplify losses and profits.

Risk management grows in importance when using leverage or trading volatile assets such as forex, bitcoin, or CFDs.

Before entering any position, you should know exactly where your 'point of pain' resides: the maximum loss you want – and can afford – to risk from any position. Consistently allowing losing trades to go beyond this point is a failure.

So, decide the maximum you can lose from any trade and stay disciplined about exiting any market if it hits that level. A common mistake among traders is to hold on to losing trades hoping that they will turn around. A good risk management plan will help you avoid this potential hazard.
Consider entering stops on all your trades.

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