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Technically the strongest way to approach days like this is with option contracts but you really need to know what you are doing and not even think for a second some guru on youtube or tiktok thinks they know what they are doing. That includes the various “signal service” sites on the net. I have met some of them in my travels and they are cast offs, some who worked in a bank for a while, who could not even sniff what it really means to know what you are doing or match the professionals I have dealt with. Use your heads people.
Frankly I don’t care what the FED does because I am not running a billion dollar portfolio at present. I just want them to sneeze and provide actionable participation opportunity without getting scorched. Therefore, I have multiple orders, very light on leverage, at various points way outside of current market. If none are reached then I pounce on the momentum. That is how I approached days like this as a CTA.
Thus week’s ranges so far… stops are generaly placed outside the low/high for the week but not sure why anyone would place a stop after a key event kike the fOMC… look at your charts to see key levels outside of these levels
EURUSD 1.1072-1.1146
USDJPY 139.57-1.4246
GBPUSD 1.3111-1.3254
USDCAD 1.3565-1.3515
AUDUSD .6694-.6789
It is fun to remember that our comments in GVI are being watched. I found a comment I made here from about a week ago regarding market conditions in the comment section (verbatim cut and paste) by someone in the forum of an online media source in the UK last night just while entertaining the mind reading peoples perspectives. I left it alone of course, why chastise someone for no good reason. Good job GVI. The content here holds value.
Part of what is keeping Dx buoyed is apprehension in stocks ahead of the FED. The conviction is lukewarm in dollar though, hence a bit of two-way motion including other markets-wide components. It is important to remember a lot of pricing in has already transpired but there are also ongoing global transactions taking place in import/export and the like so this is fluid.
Wsj’s timiraos is trying a last pro – kick at 50 pt cut in this morn’s edition claiming that 50 bps is not reserved for “severe” condition
only at 2pm will we be able to see the strenght of his “whispering”
with market significantly pricing odds of 50 pointer, I got me some popcorn to see if the FED plies to these plaeyrs
Worth noting USDJPY touched 142 but went no farther (last 141.72)
GBP getting some flows after inflation data… EURGBP extending its low (last .8409)
Otherwise it is a wait and see until Fed time, USD is a touch softer
Bond yields a touch higher
Stocks holding up
But a new ball game after the Fed decision
Until then, market bets are still for a 50bps rate cut, not sure if it is based on hope, prayer or a stronger conviction.
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What is Risk Management in Trading – Forex Forum
For any trader, managing risk is essential to success. But what exactly is risk management? In this blog post, we’ll explore what risk management is and how it can help you become a successful trader.
We’ll also look at some common mistakes that traders make when it comes to managing their risks. After all, if you’re not managing risk appropriately, you’re just a gambler. So if you’re ready to learn more about risk management, read on!
What is Risk Management in Trading?
Risk management is the process of assessing, controlling, and managing risk within a trading portfolio. This involves defining trading goals and understanding potential losses that could occur as part of the trading process.
It also includes identifying potential risks, such as market volatility or sudden changes in the market, understanding how these risks can affect your profits, and taking steps to limit potential losses.
In general, risk management should be a priority for all traders. By properly managing your risks and using effective strategies, you can minimize potential losses and increase the chances of making successful trades.
Common Mistakes When Managing Risk in Trading
Unfortunately, many traders make mistakes when it comes to managing their risks. Here are some of the most common mistakes that traders make when it comes to risk management:
Not Setting a Trading Plan:
Many traders don’t have a detailed trading plan, which is a key component of risk management. Without a trading plan, traders are more likely to take risks that could have otherwise been avoided. It’s important to establish clear trading goals and a plan for how to reach those goals.
Not Understanding Risk:
Many traders fail to understand the risks associated with certain trades, which can lead to serious losses if they don’t take the time to research and understand the risks involved. It’s important to have a thorough understanding of the markets you’re trading in before taking any risks.
Not Taking Advantage of Stop Losses:
Stop losses are an essential component of risk management, as they help to limit potential losses in the event of a market downturn or sudden changes in the market. However, many traders don’t take advantage of stop losses and end up taking larger risks than necessary.
Over-Trading:
Over-trading is a common mistake made by many traders. This involves taking too many trades, which can lead to losses if the market turns against you. Look, all traders love the price action. It’s exciting to take a position and watch your P/L go up and down. But don’t become addicted to the price action for the sake of just having a position. It’s important to only take trades when the setup is right and avoid over trading.
Not Diversifying Risk:
Diversification is another important part of risk management. By diversifying your trades, you can spread out risk and limit potential losses if the market turns against you.
Why is Risk Management Important in Trading?
Risk management is a critical factor in success when trading in the markets. It involves understanding and controlling what could potentially impact your trades and actively analyzing scenarios that may occur.
Without proper risk management, traders are leaving themselves vulnerable to potential losses which could be catastrophic for their investments.
Good risk management also allows traders to effectively assess opportunities and make better decisions that take into account volatility or leading indicators of future market performance.
Simply put, risk management can provide peace of mind so traders can enjoy the highs of profitable investments while minimizing losses when markets start to dip.
What are Some Common Risk Management Strategies?
Common risk management strategies used by traders include setting stop-loss orders, limiting capital exposure, and diversifying investments to minimize volatility.
Another essential approach for traders is to set predetermined targets for both profits and losses to help stabilize your exposure. To further limit potential losses and maximize gains, traders should always be aware of economic news and other world events that might affect the market.
How to Implement Risk Management in your Trading Plan
Implementing effective risk management into your trading plan is incredibly important for successful and profitable trading. It can help you to control the amount of draws you take in any given trade, and it can also protect against large losses which could potentially wipe out your entire trading account.
A good risk management plan should include determining the amount of capital at risk on each trade, setting predetermined stop-losses to limit downside exposure, and having a strict, disciplined approach towards minimizing losses:
never increasing position size
never risking more than you are comfortable with, and always controlling potential risk-reward ratios.
Taking the time to set up a comprehensive yet flexible risk management plan will put you in a better position when it comes to positive returns in the long run.
Risk management is an important part of trading. It allows you to trade with less stress and more confidence. There are many different risk management strategies, so it is important to find one that fits your trading style.
Proper risk management can help you make money in the long run by preserving your capital and preventing you from making careless mistakes.
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