risk management in currency trading

stops are placed at a price level above active short positions (buy orders) and below open long positions (sell orders). In the realm of active trading, risk management is a discipline essential to sustaining profitability. Ideal Market(s Which products offer optimal levels of liquidity and volatility for the selected strategy?

When used consistently and within the context of a comprehensive trading plan, stop losses and profit targets ensure that downside risk is limited while acceptable returns are locked. The risk vs reward for this trade is 25:50 or 1:2. The setting of profit targets and stop losses are key elements in developing a risk vs reward ratio. A few examples of these entities are corporations, banking institutions, governments and individual retail traders. This is not without risk, however, as central banks may adjust the pegging relationship, which would be likely to affect investment returns. Through sticking to a comprehensive trading plan, using protective stops/profit targets, understanding leverage and the concept of risk vs reward, you can effectively limit the amount of risk exposure on a trade-by-trade basis. Risk management is defined as the practice of identifying, analysing and taking steps to minimise the downside of a transaction in trieved m/definition/risk-management Any entity involved in crafting decisions regarding the financial well-being of itself or others regularly utilises the tenets of risk management. A comprehensive trading plan ensures the trader has the best possible chance of achieving replicable results. Developing A Comprehensive Trading Plan. Cargo and transport risks are reduced through cargo insurance, which is usually defined by standard international policy wordings (issued by the Institute of London Underwriters or the American Institute of Marine Underwriters).

10 Rules of, risk
Management for, currency, traders - dummies
Management, in, trading - fxcm