Risk management strategy

Forex Risk Management Strategies

1 Only trade money you don’t need
2 Always use stop-loss and limit orders
3 Think about your risk tolerance
4 Set your risk/reward ratio to a minimum of 1:2.1.3
5 Control your risk per trade
6 Keep your risk consistent
7 Understand and control leverage
8 Take currency correlations into consideration

NB… Don’t focus on making money; focus on protecting what you have.


Great post, the issues are very important Every trader should adhere to these issues. Discipline is very important in trading. So it is necessary to trade according to the plan and discipline.


I always found this rule to be the most foolish rule of all.

If you have money you don’t need then why are you trading to make even more money.




It’s been mathematically proven that the most profitable RRR trades are between 1:1 - 1:2, with the sweet spot of 1:1.5. Any higher, set initially, is less profitable.

However, as a rule of thumb, letting winning trades run or increasing their positions without increasing risk by moving the S/L is a pro strategy used with high capital backing, not small accounts.


Be ready with your risk management strategy even before you enter the market.

1 Like

sounds good too

I agree with each point that you have mentioned. Frankly, a trader doesn’t understand the importance of these points until they face the losses. When you are learning the basics of the forex market, you must spend enough time on improving your risk management skills also because it is what can save you in the long run.


I concur with each situation that you have pointed out. But once you have analyzed risks, you can thoroughly figure out the potential enforces that each will have on consumer action, your company, and other current endeavors. In the best-case scenario, you can avoid risk influences altogether. But in renouncing all activity that carries risk, you also give up all associated potential return and convenience. It is up to you what type of risk action you want to game with.

I would say the same @Brackworm. It depends on what type of risks you take under what situation and position. Limiting your risks to the minimum while increasing your rewards is the best risk management strategy in my opinion.