Manage In Forex Trading

So how do you manage risk in forex trading? Some advisors suggest setting stops in the opposite direction that you're betting the market will go in. These stops will hopefully close out your trade before the market wipes out your entire account. Stops can also be used to capture and hold profits if the market is going up and down again, assuming that you've chosen up as your prediction. Other advisors add the caution that placing stops too close can limit profits when the market does go strongly in the direction you want it to go in.

Another way of managing risk is to risk money that you can afford to lose. If you're using your rent money, then don't invest in forex. Yet another useful concept is money management. Money management is based on the idea that you will lose sometimes and
if you control the amount that you invest in each position, you will be able to weather the storm of losses. To make money management work, both fear and greed need to be kept in check.