To minimize the likelihood of a financial loss, each investor needs to have some risk management strategy in place .
Trading is about managing probabilities. Using our signals will give you a very high probability to win a trade but drawdowns are a reality and WILL happen to you at some point or another.
Anything can possibly affect the market. News can and will have an effect on the price of a particular currencies, commodities or indices in a negative or positive way.
The number one rule to follow is to never trade money that you can’t afford to lose.
Limit the usage of account leverage. We advise to use 1:50 or maximum 1:100 leverage on your account. Ask your broker to change this for you.
Use a mental stop loss to limit your drawdown and make use of countertrading, hedging and offsetting.
Instead of a stop loss (we do not use stop loss) you can make use of limit orders at predefined levels. It will give you one more chance to close your trade in positive without risking more capital.
Size down your lot size per position and spread trades in multiple asset classes don’t tie all of your capital in a single position. You should only risk a small percentage (1% to 2%) of your account on each trade so that you can survive a losing streak and also avoid a large drawdown in your account. The smaller the better.
Please make sure to read all our money management articles.