Risk Management

When more than one position opens up, risk management methods more akin to traditional portfolio management come to the rescue. Compared to trading, portfolio management is characterized by longer-term investment objectives and investments in different asset classes (stocks, bonds, commodities, derivatives). Their selection and relative weightings are made in a way aimed at achieving a certain risk profile. The portfolio [...]


Money Management

Money management focuses on the potential effects on the trading account from the execution of every single trade. In the optimistic scenario, each position will be profitable. But in the realistic one, stops will be hit, thereby realizing losses. Losing positions are an inevitable part of foreign exchange trading. The real goal for traders is to keep the number of [...]


Intro to Risk Management

Foreign exchange trading is high-risk. In practice, a trading account could be zeroed within hours. Every trader needs a clearly defined risk management strategy in order to achieve positive and consistent results. There are two main methods of risk control. Depending on the trading strategy, one, the other or both are used together. The first approach evaluates individually the impact [...]

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