Risk Management

Discussion in 'Risk Management' started by guru, Jun 25, 2020.

  1. guru

    guru

    Nice video on the topic, discussed by three professional risk managers for trading firms and hedge funds.
     
    Last edited: Jun 25, 2020
    murray t turtle likes this.
  2. actively

    actively

    This is really interesting. Thank you for sharing
     
    guru likes this.
  3. %%
    Less=more...……………………………………………………………...
     
  4. you reduce risk by using limit orders.
     
    murray t turtle likes this.
  5. risk management is the key, if you take 5 of your biggest losses and reduce them from your annual p/l the results are shocking ..
     
  6. Karin42

    Karin42

    The first thing a forex trader should do, whether he is investing or speculating, is to allocate as much money as he can lose completely and be okay with that. Psychologically, this level is at 10% of monthly income. If you plan to continue to professionally engage in this type of activity, then in no case don't trade with borrowed money taken from relatives, friends or banks. Trading should be treated as carefully as possible, as in this case, making potentially high profits involves significant risk.
    And here we approach the basic and quite logical principle: Risk and profit are in direct correlation with each other. In other words, increased risk should bring high profit, and vice versa. The conclusion from this simple principle is also quite obvious: if we take excessive risks in order to earn the same amount (or even less), then such an investment should be rejected.
    The next principle that is quite widespread in risk management is diversification of investments. We are talking about the skills of creating a balanced investment portfolio. However, before it is formed, diversification should begin with reducing operational risks. Distribution of available capital between several trading platforms will reduce possible losses due to hacking or closing one of them.