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Risk and Forex
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leo23

Member Since Oct 12, 2016  343 posts leo23 Nov 23 2017 at 15:31
Risk can be of different types in forex. But the regular risk which is being talked about is the risk of loosing money while trading which is obvious in trading.

But there must be a proper plan along with risk vs reward or drawdown % vs the monthly profit %. One should always consider both the factors risk as well as profitability of a system while trading.

TiffanyK

Member Since Feb 12, 2016  360 posts Tiffany (TiffanyK) Nov 23 2017 at 15:55
Some people trade until they lose everything, however smart traders do not do this. No decision in trading should be emotional. We all know that bad emotions lead to bad results. Stay positive!!!

Accept the loss as experience
GJscalper

Member Since Jul 25, 2016  237 posts GJscalper Nov 24 2017 at 11:33
TiffanyK posted:
Some people trade until they lose everything, however smart traders do not do this. No decision in trading should be emotional. We all know that bad emotions lead to bad results. Stay positive!!!


 It is soooooooooooooooooo easy to talk about controlling ones emotions but it is something that you already have to have. If you don't, greedy will more than likely cause you to chase a order against you system and the rabbit hole keeps deeper.

@GJscalper for more information
TribalBoc

Member Since Nov 24, 2017  10 posts TribalBoc Nov 24 2017 at 11:49
Easier said than done. Only way to eradicate emotion is to use an EA IMHO

mlawson71

Member Since Dec 11, 2015  1486 posts mlawson71 Nov 24 2017 at 16:31
For me using an EA never worked in that regard. Instead of thinking 'Did I made the right decision?' I think 'Is the EA working properly?' and then I am anxious all over again.

Patrick14

Member Since Nov 24, 2017  6 posts Patrick14 Nov 26 2017 at 07:58
It is good to give a bet to what they offer you in the commercial business, what is not good is that if you have a total of 5000 USD, you can not invest all your savings wallet / investments in a single product and remain at zero, it would be something unprofessional

Mythsphinx

Member Since Jul 11, 2017  8 posts Mythsphinx Nov 26 2017 at 15:49
We need to take risks to make money. But we need to take calculated risks to make consistent profit. Sometimes even with calculated risks, a black swan event can do a lot of damage to our account which can leave a scar on our psychology. The main thing for me is trying to learn not to attach myself to the profit I've made.

Some traders say that you have no emotions to trade the market properly. I personally think that we are humans and humans naturally have emotions. So I don't try to fight my own nature. I also know that I can't predict the market, so I don't try to. One thing that I can predict, is my own behaviour. It actually took me a few months to figure myself out, but I observed my own behaviour and try to manage them.

I now know how I react when I make/lose money, I know how I react when I win 3-5 times in a row or when I lose 3-5 times in a row. So I plan what to do when it happens. I know how I feel when I start to get greedy and I think of ways to deal with it ahead of times. I also know how I react when I'm fearful. Unfortunately, I haven't mastered fear as well as I mastered greed. But I am trying to deal with it. If people reflect on their actions and try to be proactive towards their own behaviour, then they will probably do be better traders. I personally don't try to get rid of my emotions, I just try to manage them.

In my opinion, the biggest risks in trading is our behaviour when we are emotional about a particular trade. This is the number 1 reason for my failures.

mlawson71

Member Since Dec 11, 2015  1486 posts mlawson71 Nov 29 2017 at 16:20 (edited Nov 29 2017 at 16:20 )
Mythsphinx posted:
In my opinion, the biggest risks in trading is our behaviour when we are emotional about a particular trade. This is the number 1 reason for my failures.


That is certainly one of the risks involved. But you also have random events causing spikes in the price, and those are unpredictable.

BonkersBit

Member Since Nov 30, 2017  10 posts BonkersBit Nov 30 2017 at 15:34
Those are risks but they are not that often. Usually they are when there is a economic announcement and those are scheduled

mlawson71

Member Since Dec 11, 2015  1486 posts mlawson71 Dec 02 2017 at 15:14
BonkersBit posted:
Those are risks but they are not that often. Usually they are when there is a economic announcement and those are scheduled

True, most are scheduled. But you also have events like the Swiss bank unpegging the CHF which threw the market into chaos totally unexpectedly.

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HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions. Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.