How To Manage Risk: Reward In Forex Trading

Today, I came a cross a very interesting article that explains on how a forex trader can manage their Risk: Reward ratio in their forex trading activity.

Your Risk: Reward ratio is very important if you want to be successful in growing your forex account on a consistent basis.

A good ratio can let your account grow even though you are only winning 50% of your trades.

In the forex trading world, it is whole course to study on its own.

So, i will let other experts teach you (as well as me :) )

Here is the article on how you can manage your forex Risk: Reward ratio:

Risk Reward and Money Management in Forex Trading

Money management in Forex trading is the term given to describe the various aspects of managing your risk and reward on every trade you make. If you don’t fully understand the implications of money management as well as how to actually implement money management techniques, you have a very slim chance of becoming a consistently profitable trader.

I am going to explain the most important aspects of money management in this article; risk / reward, position sizing, and fixed dollar risk vs. percentage risk. So, grab a cup of your favorite beverage and follow along as I help you understand some of the most critical concepts to a profitable Forex trading career…

Risk : Reward

Risk reward is the most important aspect to managing your money in the markets. However, many traders do not completely grasp how to fully take advantage of the power of risk reward. Every trader in the market wants to maximize their rewards and minimize their risks. This is the basic building block to becoming a consistently profitable trader. The proper knowledge and implementation of risk reward gives traders a practical framework to do this.

Many traders do not take full advantage of the power of risk reward because they don’t have the patience to consistently execute a large enough series of trades in order to realize what risk reward can actually do. Risk reward does not mean simply calculating the risk and reward on a trade, it means understanding that by achieving 2 to 3 times risk or more on all your winning trades, you should be able to make money over a series of trades even if you lose the majority of the time. When we combine the consistent execution of a risk / reward of 1:2 or larger with a high-probability trading edge like price action, we have the recipe for a very potent Forex trading strategy.

Read the full article here

Yours sincerely,




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