BASIC FOREX RISK MANAGEMENT

Forex trading could be the thing that promising, challenging, but at the same time also very risky. As the saying goes, High risk, high return. With the risk of loss is very high, a trader / investor requires not only mental preparation and tremendous courage, but also the ability of the brain that control emotions brilliantly and stable. It's no secret that the world trading gains and losses of any kind is a natural thing. Profit or loss is the effect (consequence) for a trader / investor when making the decision to buy / sell. If an investor or trader decides to enter the world of forex trading

In trade, both in general trade and forex trading, there is always a risk of loss! Risks can not be avoided but can be minimized, that is by implementing risk management are:

1. Stop loss and profit limit. Create a limit to how far you are willing to bear the loss and make a restriction to realize profits.
2. Cut loss. If you think the price reverses direction so it does not fit with your prediction, you better 'bear' to cut losses rather than to bear greater losses, especially those of you who do not set limits for stop loss.
3. Switching or turn around / direction. If you know that you are incorrectly predicted price movements, for example if you take a buy position that the price tends to be stronger for the down / fall then you can close the transaction before by cut loss. After that you can take short positions.