Guys, do you know the difference between the rich and the poor? Ya
correct! Poor people avoid risk while rich people manage risk. Well,
therefore belajarforex here will teach you about some simple tips in
risk management or in other words how to manage risk when you trade.
Here we are giving 4 kick, each described briefly in this article. A
more comprehensive explanation we discussed in another article
1. CUT LOSS
Cut Loss is the Act of closing the position the losers because the price
moves against the predictions of us, so that we can avoid larger
losses.
For example:
you predict GBP/USD will climb from 1.2000 to 1.3000.
Then decide buy (Buy) price now at 1.2000 in hopes prices will rise so you can sell with a higher price and profit
But it turns out that the price does not rise, the contrary down to 1.1700!
And after doing analysis, You will most likely conclude that prices will fall further,. Of course this will lead to greater losses.
So what should you do?
Rather than suffer a greater loss, you have to decide to do the close position (liquidate). This is called a cut loss
With this you just cut loss suffered losses amounting to 300 point.
Tips doing a Cut-Loss
For example:
you predict GBP/USD will climb from 1.2000 to 1.3000.
Then decide buy (Buy) price now at 1.2000 in hopes prices will rise so you can sell with a higher price and profit
But it turns out that the price does not rise, the contrary down to 1.1700!
And after doing analysis, You will most likely conclude that prices will fall further,. Of course this will lead to greater losses.
So what should you do?
Rather than suffer a greater loss, you have to decide to do the close position (liquidate). This is called a cut loss
With this you just cut loss suffered losses amounting to 300 point.
Tips doing a Cut-Loss
- Do CUT LOSS if after analysis, the price will move continuously as opposed to your position
- If it turns out your decision in doing CUT LOSS right, means you're preventing ourselves from the larger loss
- If it turns out your decision in doing WRONG, CUT LOSS means you've prevented ourselves in terms of reducing losses at this time (or even reach the profit). This means the price will move toward your initial expectations.
Have you called the FAILED when doing a CUT LOSS?
The Answer: No. Because there's still tomorrow, there are still TRADING SESSION to another. Not a problem these days you lose, because we still see brighter tomorrows. There is still a chance of profit or the next larger than losses at this point.
We should be amputation of a body part that hurts cancer, so that another body is healthy and able to berkativitas again. Release 1 of the wrong analysis is strongly recommended to perform trading better in the future.
The Answer: No. Because there's still tomorrow, there are still TRADING SESSION to another. Not a problem these days you lose, because we still see brighter tomorrows. There is still a chance of profit or the next larger than losses at this point.
We should be amputation of a body part that hurts cancer, so that another body is healthy and able to berkativitas again. Release 1 of the wrong analysis is strongly recommended to perform trading better in the future.
2. SWITCHING
practically we close our position (cut loss) that are losing money and contrary to our predictions and then open a new position following the price moves against the expectations, the profit position of the second bigger than the first position that already Cut Loss.
practically we close our position (cut loss) that are losing money and contrary to our predictions and then open a new position following the price moves against the expectations, the profit position of the second bigger than the first position that already Cut Loss.
Switching is done a turn of direction by closing loss-making positions,
because the price moves against the predictions, continued and open a
new position following the price movement is going, in the hope that the
second position of advantage will be greater than the first position
that already Cut Loss.
For example:
you predict GBP/USD will climb from 1.2000 to 1.3000.
Then you Buy GBP/USD at 1.2000 price in hopes prices will rise
. But it turns out instead of up, on the contrary down to 1.1700!
And after analysis, you conclude that the predictions that the price will go up is wrong, and predicted prices will fall to 1.1000.
What should I do?
Rather than fight the market price and suffer losses and and prices will fall further than now, Decide to close your position Buy now losers (Buy 1.2000, close at 1.1700) and open new positions Sell in the 1.1700 (in hopes the price will come down to 1.1000).
After a while it turns out that prices continue to go down to the 1.1000 so you get the advantage of 700 points (1.1700 – 1.1000). Greater than the losses on the first position which closed earlier, amounting to-300 points (1.1700 – 1.2000).
So when you close the Sell your position, your profit on that day amounted to 700 – 300 = 400 points.
Tips:
– Do the SWITCHING by opening a second position as opposed to the first position only when predictions of profits exceeds the value of losses the first position will be closed
. – If it turns out the prices change in accordance with predictions turned out first, then you will suffer harm twice, namely the first and second positions are also
For example:
you predict GBP/USD will climb from 1.2000 to 1.3000.
Then you Buy GBP/USD at 1.2000 price in hopes prices will rise
. But it turns out instead of up, on the contrary down to 1.1700!
And after analysis, you conclude that the predictions that the price will go up is wrong, and predicted prices will fall to 1.1000.
What should I do?
Rather than fight the market price and suffer losses and and prices will fall further than now, Decide to close your position Buy now losers (Buy 1.2000, close at 1.1700) and open new positions Sell in the 1.1700 (in hopes the price will come down to 1.1000).
After a while it turns out that prices continue to go down to the 1.1000 so you get the advantage of 700 points (1.1700 – 1.1000). Greater than the losses on the first position which closed earlier, amounting to-300 points (1.1700 – 1.2000).
So when you close the Sell your position, your profit on that day amounted to 700 – 300 = 400 points.
Tips:
– Do the SWITCHING by opening a second position as opposed to the first position only when predictions of profits exceeds the value of losses the first position will be closed
. – If it turns out the prices change in accordance with predictions turned out first, then you will suffer harm twice, namely the first and second positions are also
3. AVERAGING
Averaging is reopen new positions in line with a long position
despite the current price moves against or with the belief the price
will move in accordance with our predictions. Averaging taken when we
are sure that price changes that occur will again change according the
original prediction.
Averaging taken when we are confident that the price will again turn the original predictions fit.
This means that when we predict prices will rise, apparently instead came down, and we still predict rates will go up, there we do averaging. So when prices return to a buy position first, we've been lucky. That is from a position of
. Example:
you predict that the price of GBP/USD will climb from 1.2000 to 1.2500 and you open a Buy position
. Not long later the price moves down to 1.1800, because you remain convinced prices will rise, you open position BUY again at 1.1800.
The lapse of some time it turns out that the price back up and now are at the level of 1.2000.
If you liquidate your position then the second: the first Position = break even and the second position = Lucky
200 points. Averaging can also be done when we are lucky, for example:
you predict that the price of GBP/USD will climb from 1.2000 to 1.2500 and you open a Buy position
. Shortly afterwards it turns out correct price moves up, currently residing in level 1.2300. because you remain convinced prices will rise to as low as 1.2500, you open position BUY again at 1.2300.
If the price moves up to 1.2500, you get double the advantage of position to one and two. That is as big as 500 points of the position to a position 200 and points of
. But if it turns out the price even down to 1.2200, then you are still lucky that is of 100 points. From the position to one lucky 200 point and from the position of the two 100 point loss. so the net gain on the second when closing a position that is 100 points.
This means that when we predict prices will rise, apparently instead came down, and we still predict rates will go up, there we do averaging. So when prices return to a buy position first, we've been lucky. That is from a position of
. Example:
you predict that the price of GBP/USD will climb from 1.2000 to 1.2500 and you open a Buy position
. Not long later the price moves down to 1.1800, because you remain convinced prices will rise, you open position BUY again at 1.1800.
The lapse of some time it turns out that the price back up and now are at the level of 1.2000.
If you liquidate your position then the second: the first Position = break even and the second position = Lucky
200 points. Averaging can also be done when we are lucky, for example:
you predict that the price of GBP/USD will climb from 1.2000 to 1.2500 and you open a Buy position
. Shortly afterwards it turns out correct price moves up, currently residing in level 1.2300. because you remain convinced prices will rise to as low as 1.2500, you open position BUY again at 1.2300.
If the price moves up to 1.2500, you get double the advantage of position to one and two. That is as big as 500 points of the position to a position 200 and points of
. But if it turns out the price even down to 1.2200, then you are still lucky that is of 100 points. From the position to one lucky 200 point and from the position of the two 100 point loss. so the net gain on the second when closing a position that is 100 points.
4. CROSS HEDGING
Hedging means we are opening two opposite positions so even though prices are rising or falling, floating value stays the same so as to protect the position of owned (hedging: hedging)
Hedging or Locking the term was taken because as we use this dwarf in our position is locked so that the value of the advantages and disadvantages of always moving hand in hand, the aftermath has two mutually opposite position.
Logically, hedging is actually not allowed because it means we play with ourselves. just imagine at the same time you do buy position on 1 lot GBP/USD pair and position sell 1 lot at the pair GBP/USD. This means your profits in one of the positions is your loss on the position of the other. As for the referenced Learn forex brokers do not allow hedging. If you do buy position on 1 lot GBP/USD pair and then try to open a sell position on 1 lot GBP/USD pair, then this means you close the position first.
Unlike the
CROSS hedging, HEDGING means we are opening two opposite positions towards different currency pair however still grouping of the. The intent of the grouping here is the trend movement of both currency pair tends to be the same as: GBP/USD with the EUR/USD; AUD/USD with NZD/USD. If the GBP/USD rises, then EUR/USD the appropriate join up, apply also when descending.
Hedging means we are opening two opposite positions so even though prices are rising or falling, floating value stays the same so as to protect the position of owned (hedging: hedging)
Hedging or Locking the term was taken because as we use this dwarf in our position is locked so that the value of the advantages and disadvantages of always moving hand in hand, the aftermath has two mutually opposite position.
Logically, hedging is actually not allowed because it means we play with ourselves. just imagine at the same time you do buy position on 1 lot GBP/USD pair and position sell 1 lot at the pair GBP/USD. This means your profits in one of the positions is your loss on the position of the other. As for the referenced Learn forex brokers do not allow hedging. If you do buy position on 1 lot GBP/USD pair and then try to open a sell position on 1 lot GBP/USD pair, then this means you close the position first.
Unlike the
CROSS hedging, HEDGING means we are opening two opposite positions towards different currency pair however still grouping of the. The intent of the grouping here is the trend movement of both currency pair tends to be the same as: GBP/USD with the EUR/USD; AUD/USD with NZD/USD. If the GBP/USD rises, then EUR/USD the appropriate join up, apply also when descending.
For example we have expectations of the GBP/USD will go up, then open a
buy position of 1 lot, but it turns out the price moves down. To prevent
losses then AirAsia opened a position sell 1 lot, but not in GBP/USD
EUR/USD at malainkan which also shows the tendency of price moves down.
Then the price moves down either GBP/USD or EUR/USD. On the one hand the value floating loss GBP/USD enlarged but on the other side of the floating profit value of EUR/USD also increased.
Prices continued to move down until it began to show that prices are going back up (see picture). At the time the price will go back up, then position sell 1 lot EUR/USD closed with profit conditions. Well, and now "buy 1 lot GBP/USD, i.e. the first position we
. Long story short, prices rise steadily until it is higher than the open price of GBP/USD buy position (profit) and then to buy position of 1 lot GBP/USD is closed in profit.
Then the price moves down either GBP/USD or EUR/USD. On the one hand the value floating loss GBP/USD enlarged but on the other side of the floating profit value of EUR/USD also increased.
Prices continued to move down until it began to show that prices are going back up (see picture). At the time the price will go back up, then position sell 1 lot EUR/USD closed with profit conditions. Well, and now "buy 1 lot GBP/USD, i.e. the first position we
. Long story short, prices rise steadily until it is higher than the open price of GBP/USD buy position (profit) and then to buy position of 1 lot GBP/USD is closed in profit.
Tips for you:
1. Cross hedging can be used to analyze and produce profits like the example case above
2. The movement of the currency pair grouping not always unidirectional. Sometimes the GBP/USD is moving up, but the EUR/USD is moving down. This may occur if the GBP currencies experiencing reinforcement and EUR decline.
3. The movement of the currency pair grouping are not identical. This means that if the GPB/USD gained 5 points, does not mean that EUR/USD is also definitely strengthened as much as 5 points.
1. Cross hedging can be used to analyze and produce profits like the example case above
2. The movement of the currency pair grouping not always unidirectional. Sometimes the GBP/USD is moving up, but the EUR/USD is moving down. This may occur if the GBP currencies experiencing reinforcement and EUR decline.
3. The movement of the currency pair grouping are not identical. This means that if the GPB/USD gained 5 points, does not mean that EUR/USD is also definitely strengthened as much as 5 points.
