Actually to implement the risk
The maximum in each of our tramsaksi
can do this in two ways:
set stop-losses or adjust the volume
the transaction. But set the stop-loss
usually less desirable because the
stop-loss is generally associated with the system
trading and are likely to already have
magnitude of its own.
For that you can do is
by adjusting the volume
the transaction.
Suppose you trade with
conditions as follows:
- Equity of $ 10,000
- Risk of a maximum of 2%.
- Stop-loss orders you normally use
is 50 pips.
Then the maximum loss that may
occur for each transaction is,
2% x $ 10,000 = $ 200.
Meanwhile, the Stip-loss of
50 pips then the value of a pip for
transaction that you would do is,
$ 200 / 50 = $ 4 for every pip.
From this value we can calculate
The maximum volume of transactions in a way
dividing the value of each pip to 0.0001.
The maximum transaction volume:
$ 4 / 0.0001 = $ 40.0000
Or equal to 0.4 lots only.
So if there is a forex broker who
establish minimum transaction
for 1 lot then the minimum equity
should be prepared to trade
with good risk management
should not be less than $ 25,000!
Less than that, then the application
good risk management becomes
possible and likely accounts
will not last long.
From the above calculations we can also
concluded that the risk management
both require a trader to
be realistic in setting
target profit and risk.
Rob Booker, one of the traders and
forex-top trainers world always
advise traders not to
to risk more than 1% in
each transaction. This is a suggestion that
well, unfortunately many traders
tempted to ignore this because for
achieve a large profit.
Consequently, inevitably forced
received a great risk as well.
In normal situations the target profit (and
risk) is large does not become
the problem. Only becomes a problem when
poor trading situation occurs,
such errors occur in
analysis and prediction, or appear
siruasi unexpected that makes the market
U-turn. In many cases,
Such conditions will become tombs
for traders who are accustomed to taking
risk and a big target.
Treat the risk management provisions
This good as the obligation
wearing a helmet or seat belt.
In normal circumstances it seems
the use of helmets and seat belts are not
useful as well as inhibiting freedom. But
quite an accident you will mebuat
thank you for using it.
Selasa, 06 Desember 2011
Setting the Volume of Transactions
