Forex Why is risk management important for forex trading?

[FXOchartist]

All businesses have risks, but the risk level for each business is different, some have low, medium and high risks. Meanwhile, forex trading is a high-risk business, so it is necessary and important to implement risk management.

Risk management will help us to recognize what risks we may face and what steps we need to take to secure or minimize some of our losses. For some professional traders, risk management is the main key to success. Proper risk management can not only prevent traders from losing, but also optimize profits.

Trading risks can be further divided into two, namely:

1. Total Equity Risk: Professional traders usually recommend that total risk be limited to a maximum of 1%-2%. This means that traders only use a maximum of 1%-2% of total equity for forex trading at one time.
2. Risk per Trading Position: Once you have determined the total equity risk limit, then risk management per trading position can be implemented. This risk management practice is simple, namely determining the size of the stop loss

Forex trading without risk management has its own consequences, the higher the risk taken, the fewer opportunities to open new positions.

To practice trading by implementing risk management, you can open an ECN FXOpen demo account, you can use MT4, MT5, or Ticktrader platforms with sophisticated designs for ECN brokers. It could be your first path to trading expertise