Forex Tips : Risk Management
One of the most important topics you will ever read about in trading is risk management which is often overlooked by many new traders.
What is the significance of this? We are in the business of making money, and in order to do so, we must learn how to manage risk which avoid in potential huge losses.
Many forex traders like me initially are simply eager to get started trading without regard for their total account size.
My first few trades into GOLD (XAU/USD) were simply determining how much money I could afford to lose in a single trade and how much I could win by pressing the "Place" button in MT4. This type of trading is known as gambling, and it usually results in losses. I'm fortunate to have only a few hundred dollars in losses.
Risk management rules should be a part of your trading strategy. Risk management plan will not only keep you safe, but they will also make you very profitable in the long run. You will have a better chance of being profitable if you learn how to control your losses. I've got my risk management rules in place with my trading plan now, and it's definitely improved my monthly profitability consistency.