How to manage the risk exposure at trading

Google+ Pinterest LinkedIn Tumblr +
Image by Anna Nekrashevich from

Everyone knows trading is a very sophisticated profession. You might get easy access to the online trading community, but there is no assurance you will succeed as a trader. Thousands of traders have started their careers in the investment world, but most of them have failed miserably. If you want to protect your capital, you must learn to take trades in a standard way. Never take things aggressively in the learning stage. Though trading provides an insane amount of profit potential, you must learn to trade safely.

Elite traders always follow some common techniques to manage the risk exposure. Let’s learn about the actions of elite traders in Denmark and improve our risk management skills.

Be prepared to lose trades

Novice traders never think about the losing trades. They are always prepared to deal with winners. But the Forex market doesn’t work like this. A trader needs to understand that this market is all about probability. If you want to succeed as a full-time trader, you must consider the worst-case outcome of each trade. If you prepare yourself to lose money from a certain trade, you are not going to get frustrated after losing a few trades. This will make you more confident and let you deal with the losses in a systematic manner. Stick to your trading method and never break your own rules after losing a few trades.

Trade with the best broker

You must find a great broker to ensure a high-quality trading environment. Go to and try to learn about the features of a high-end broker. Once you open a trading account with a well-regulated broker, you can easily execute quality trades by using the advanced trading platform. But it takes time to learn the use of modern tools. As a learner, use the demo account first few months. Explore the tools and try to find a perfect way to use these tools. Never follow other people’s opinions or use a purchased trading system to trade the market. Use the demo account and develop your skills. Keep trading with a high-end broker so that you don’t have to deal with any unexpected losses.

The risk factor in each trade

You might be thinking that taking 2% risk in each trade is fair enough. But things don’t work like this. If you open 5 trades and risk 2% in each of them, you are risking 10% of your capital. No matter how good you are at trading, the overall risk exposure in the trades should never exceed 3% of your account balance. So, if you open two trades at the same time, you can risk 2% in one trade and in the other, you have to risk just 1% of the account balance.
Trade in the demo account for few months and you will realize why trading with high risk is so lethal. Always maintain a high risk to reward ratio in the trades so that you can cover your losing trades without having any major problems.

Trade with a simple strategy

To succeed as a trader, you need to trade with a simple strategy. Without using a simple trading method, you will lose track of trading. Many novice traders often love to trade with a complex trading method. To them, a complex trading strategy is more lucrative and they think it will help them to earn more. But in reality, a complex trading system always makes things difficult for rookies. As a novice trader, you will find it very challenging to analyze the critical market data within a short time by using a complicated method. Instead of that, if you rely on a simple trading system, you can easily improve your trade execution process and make better decisions. Most importantly, you can trade in a more relaxed way.


About Author

Hi, Friend! My name is Gran Layson. I am an experienced currency and stock trader from Europe. If you want something to be done well, do it yourself, therefore often I feel myself as “Swiss Army Knife Man”. I am the Intomillion’s website administrator, developer ... read more

Comments are closed.

Forex Brokers
  • We believe in what we do

    Since the foundation of the project, we have been trying to turn one Dollar into a Million. Many dollars were lost on the way to the cherished goal. Nobody said it was going to be easy. However, we believe that everything is possible. Each time we lose a Dollar, we start again stronger with more experience and dedication. Today the project is much more than just about a Dollar. Our philosophy is openness and transparency. So apart from trading on Forex, we are creating a variety of useful Tools, sharing our developments, ideas, and experiences with our followers. We are true fans of financial markets and looking forward making trading more understandable and showing that profitable trading is possible.

All information on this page is subject to change. Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. owners and affiliates will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.