In business it is common knowledge about the hierarchy of control in risk management.
In Spot Forex to be successful one should also apply such principles.
At the top of the hierarchy pyramid is elimination of risk. Often because of the nature of Spot Forex this is very easy and the best risk mitigation principle to apply.
- High impact economic data releases.
Prior to the scheduled release don’t have any open positions on currency pairs that may be effected.
- Close trades prior to weekend due to risk of weekend gaps.
Next in order is substitution. If anyone can think of a way to substitute please share.
Third on list is engineering control.
- Use stop loss orders.
2 Take profit orders.
- Trading robots.
Administrative control comes next.
- Have a trading plan written down and stick to it.
- Have money management system written down and stick to it.
- Have a trade diary and record your trades.
And finally we come to personal protective equipment. Once again I can’t think of anything here but if anyone can please share.
Also please add to my list if you can think of anything else.
Wishing everyone happy, safe and prosperous trading.