You can analyze market opportunities endlessly,
But if you don’t manage your risks, you won’t sustain your profits.
Risk Assessment
– Evaluate the risk of every trade before execution.
– Use historical and current market data for informed decisions.
– Always consider the worst-case scenario.
Capital Allocation
– Allocate capital based on risk level, not just potential return.
– Use a tiered investment approach to manage exposures.
– Never risk more than a predetermined percentage of your portfolio on a single trade.
Loss Management
– Set strict stop-loss orders to limit potential losses.
– Adjust stop-losses in response to market movements or new information.
– View stop-losses as a tool for risk management, not just loss prevention.
Profit Protection
– Secure profits through the use of trailing stops and profit targets.
– Regularly take profits to reduce exposure and lock in gains.
– Reassess profit-taking strategies as market dynamics evolve.
Diversification
– Spread risk across different currencies and trade setups.
– Avoid over-concentration in any single currency pair or market.
– Regularly review and adjust your diversification strategy.
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