Either it is proper company or Forex business in every field of trade there is some portion risk involve. This risk is manageable but some of the macro risks could not be managed. Risk is an essential of every business so we should not have a fear of risk. Of course risk is essential because your income is directly proportional to the risk involve in every type of business as in higher risk there is a chance of higher profit and less risk involve small income.
Risk is always present, it should not be feared but should always be considered as when it is not considered, traders make hasty decisions due to greed and make losses. In this world there is many types of business. Whichever you want to do you will have to take risk. There is no risk free business in this world. It will depend on you that how much risk you can handle.
Yes risk is essential in every business specially forex involves high risk . If we are reluctant to take risk we can not face market. Reward is as per risk we take on any trade. We should know the art of risk management in certain conditions to get maximum benefits.
Like your words, in forex we only need very short time to know the result,
while real business takes month to year to know if the business not profitable.
well it about managing risk when we are trading,
we cannot do anything if it is coming from outside, if there is crash in trading floor, if suddenly government under attack by alien,
but we can control ourselves and managing to control ourselves to reduce the risk placing wrong trade, risk to not wanting closing losing position, risk of overleverage, risk of overtrade etc.
Risk is everywhere and we could never avoid it, but in Forex Trading if we learn proper risk management, we could turn those risks into rewards and make lots of income through it.
Yes no no risk no reward. If you had courage to take risk you will try to take profit. Just risk is nothing until you are not able to manage it. It will then grow your account. Some risk is essential for experiences and experiments . without it you will be a coward trader.
Face market , face problems try to understand what is right this time . Forex trading is not easy as A,B,C . It requires your whole attention to know how to trade successfully in market. Your practice and experience will help you to overcome different difficulties . No one can tell you what is specific hard in trading.
Every faction of Forex market always contains huge risk and there is no one who can avoid loss completely when trading despite of good trading knowledge. so besides acquiring real trading knowledge we have to emphasis on the ability about “Risk Management “.
If you accept trading is a probability game, then you accept the certainty of losses, not the risk of losses.
e.g. if your strategy has a 65% win rate, it is statistically certain that 35% of your trades will be losers. So this is not a risk, surely? Its just a business over-head, like your phone bill or electricity bill or local taxes on your premises.
So calm down about whether this or that trade might be a loser. Some will be, 35% in my example, and it just doesn’t even matter which ones are the losers, as long as there is only 35% of them. It can’t be avoided.
So there remain only four real types of risk that can be avoided -
the market delivers a black swan event that takes your losses beyond your standard loss limit, let’s say that is 2% of capital per trade, and knocks you out of trading
that you fail to limit your maximum loss per trade to a sustainable level, e.g. 2% of capital per trade
that you fail to apply your own strategy
that you fail to make sufficient profit, e.g. by cutting or scaling out of your winners or failing to take trades when opportunity occurs.
I think the more important question is not about win rate, or the ‘risk’ of losing capital, but more so understanding the probability that a string of losses will occur at some point in time - if you have a big enough sample size. This is, at the end of the day, a statistical certainty.
Here’s something I worked on when trying to answer such a question…
It’s the blue line that you want to focus on, it shows the probability of having a run of losses when your trading system has an average 55% win rate (which is quite suitable for most retail traders when you eliminate human emotions).
The orange line is just me modeling the relationship between a string of losses and risking 3% per trade, along with 2% and 1% on other separate charts.
Sorry Chris, No great idea about this. Because I always prefer long time trade, it’s really safe and sounds than scalping which always contains huge risk.
Dear, that’s not funny. Actually you didn’t understand the message I had. I am continuing in long term, of course there is risk but not as like the scalping that you have. Hope, clearly understand.
Hadden , I understood your message. Thank you. Even though scalping always contains huge risk, but from all trading techniques it brings profit in a short time. that’s why this is one of the most usable and profitable trading approach in Forex trading place. Best of luck with your trading approach .
