In my opinion this is the most important and essential part of trading. Many people know how to make pips, (well, perhaps not that many!), but even fewer know how to keep pips!
It’s like your entering into the swimming pool for a swim. You enter the shallow end, with your feet on the water, you’re testing the grounds, demoing if you like, but as you venture further, towards the deep end, you’re going to have to be able to swim. Having the ability to stay afloat – this is what trade/risk/money management is all about. It can’t be stressed enough.
Ok, so how does one actually implement and apply trade and risk management?
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Raghee explores: “Trade and Risk Management is the topic for this month’s IBFX Live Webinar series that I am teaching throughout April. I thought I would outline a few basics of how I manage trades using yesterday’s update. Let me add that trade management can be effected by a handful of things that include economic releases (both scheduled and unscheduled) as well as the average pip movement for the pair during the time the trade is live. I will discuss the entries and use basic levels to walk through the management of the yesterday’s momentum entries on the 30-minute EUR/USD.”
Now, please note that everyone has their own style on trade/risk/money management. I am different to Raghee, Raghee is different to Michael, Michael is different to everyone else, etc… But the underlying principles are always the same, and it’s in this respect that we’re talking about Raghee’s post, which is of great benefit.
To read up on her explanation, click on: