Managing risk in traded

Beginner Questions
1

So I’m relatively new to forex and still getting my head round how to manage risk. I use EToro and split my capital into 5 trades and aim for 1%/1.25% profit. I set the stop loss at 50% for each trade so maximum exposure of 10%. I find with such a large stop loss my trades can run for a couple of days. Would really like to understand if there is a better way?

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2

Sorry mate, Do you mean you are risking 10% of your entire account to gain 1% profit?

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3

Risk management helps sustain investment. From my point of view, I think there is a 1: 2 risk ratio and 2% risk in each trade.

4

Basically yes

5

You must manage risk when trading. I also think that 1: 2 risk management is needed to sustain the investment and with that stop loss needs to be used in every trade.

6

Thanks Liam what does 1:2 risk ratio mean? So for example your total capital is £10k what would that mean re your risk ratio example?

7

1:2 means your profit target is twice larger than stop loss.However it is important to choose position carefully so the risk per trade doesn’t exceed 2-3% of equity.

8

Risk management is the most important thing in this market.

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9

You are on the fast track to blowing your account. Sure, there are better ways.

First, find another regulated broker. eToro has the worst spreads of all the main brokers. That will eat into your capital, when CMC, IG, XTB and IC have the best.

Protection of your capital at all times is critical, and risking 10% will run into a losing streak, and you’ll be struggling. Without knowing your trading process, style or strategy I cannot suggest how you could improve, apart from keeping a maximum 5% risk on open pairs - and taking it slowly, FX is not a fast track to making money.

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10

to manage risk for all time with same ratio is the main challenge , its a great trading skill , and if you can pass a long time in there with more patience only in that time you could be experienced about risk management , otherwise there is no way.

11

It’s a shame that many people underestimate the risks in this industry and end up with losses. It is important to correctly assess all the risks in such a situation.

12
How do I manage my risks when I'm scalping, and what percent of risk should I manage to be on the safe side?
13

anyone that works for you is the better way, keep getting better