You have to recognize that there is an element of risk in every position in the stock market and accept the fact that you can lose money in any order.We must not think in absolute terms. In investment, one must always think in terms of performance. If you make a 10% return, that’s fine, especially if you don’t take too many risks!
When you enter a position, you have to weigh the pros and cons, the gain and the potential risk. That’s why we often talk about a risk / reward ratio of 1: 4. The Giga FX Review offers all supports in this matter now.
For the Traders
Traders who abide by this trading rule are ready to earn 4 euros for every euro lost. Your Stop Loss and Take Profit must be placed according to the rules of money management Forex. Always assess the risk of every Forex trade before you think of potential profit!
- It is better to make small, solid profits than big one-off gains. If you enter the market with the mindset of a poker player, you are almost certain to lose your money!
- Before you start trading Forex, look at the size of your positions. The size of the position will directly influence your investment risks and possible losses.
- The size of the position should correspond to your equity. Often investors will have a maximum of 5% to 10% of their capital in a stock market position so as not to put all their eggs in one basket.
Forex trading is risky and you should never compromise more than you are willing to lose. You must also deposit a reasonable amount of money into your trading account.
The worst in terms of risk management is to borrow to invest in the stock market. Never do that! Doing so will surely guarantee a loss, and you will be frustrated and patience will be lost!