Risk Management

A business will never be apart from the risk. Any business that we have certain risk geluti the inside. Thus we need a way to reduce that risk, it is called Risk Management. That means how we can control the risk or responsibility of how we minimize the risk.

As already described in earlier statements, an investment, regardless of type, have a risk as well as the expected profit. Risk of this form of loss of some or all of the funds that we invest in either a long time or even in a short time. In a matter of days for example.

There is a law in general in the world of investment: an investment that promises a big return, the investment has the same amount of risk with the promised return. Conversely, if you're looking for a small investment with risk, which usually return small also offered.

This needs to be understood not remember all the people have the same investment profile. There are people who risk bertipe lover with the reason the promised return is also large. Conversely, there is also a security feature and search for investment funds with minimal risk with the possible consequences of the return generated is also small. People like this usually called averter risk. There is no better with each other. That return to the private character of each investor.

There are several types of investment that has a small risk in the financial markets of which deposits, mutual funds protected, the State debt, and savings. A high risk of which is the product of Shares and stock measure.

How about forex trading? Because the products classified as investment stock measure (index, commodity and forex), the forex trading investments are classified as high risk. This means that forex trading has classified as high risk. One of the highest among other financial investment instruments.

Some risk factors that you must know before you start investing in forex trading:

• Possible loss of funds has a 100%
• Flow of funds very quickly (very liquid)
• There is no method of trading that can guarantee you 100% sure hit. There are many methods of trading a good but no one can guarantee 100% sure hit.

Forex trading is not a "rich quick scheme" that can suddenly make you rich without working hard. No. That's the dream! There is no success without hard work. Hard work is the part that is not separated from those who have experienced financial success in life. Including those who are successful through forex trading. Hard work necessary to learn the analysis and market behavior so that we can guess the direction of price movement accurately. So also needed extra mental results when trading is not in accordance with what we expect.

Ask the traders success that you know, whether they had experienced in the fall up trading them. And the answer is almost certainly yes. The success is only provided for those who want to try to continue to learn and improve himself.

Now associated with the risk that must be faced if we want to start investing in forex, you need a special trick-tips to minimize or even reverse our position that was minus a positive return and get lucky. Here are some tips and risk management that you can take:

1. Cut loss
   Action is close your position with the opposite movement of the market price. Cut loss is used to limit losses experienced so that it does not cause a loss greater.
   For example, say we are opening our position on the Open Buy GBPUSD at 1.8000 price. Buy to open a position means that we expect the price increase exceeds 1.8000, so we get hit. We hope the price moves up to 1.8100 for example so that we can get a 100 point profit. But what power, the prices move opposite to what we expect. In fact the price continue to move down from 1.8000 into 1.7980 and still show drift down.
   Now than we lose more and finally a margin call then the better position is closed even though we bear the 20-point loss (1.8000 to be 1.7980 = -20 point). This action is called the loss that is cut close position to prevent the loss of large losses.
2. Switching
   This action is similar to cut loss, but the difference after we close the position the losers, we
   a new position with the same direction with the movement of market prices.
   In the case of the same cut over the loss, then we close our position at 1.7980 then we opened a new position as the Open Sell prices tend to decline. Thus, if prices continue to go down, say to reach 1.7900 so overall we have 20-point loss, but profit gain of 80 points (1.7980-1.7900 = 80) so that the total profit we still get 60 points.
3. Averaging
   This requires extra capital to maintain the position we have open that move opposite to the market price.
   Say in the same case with the Loss Cut above example, if we want to do action averaging then we open a new position, but in this case is not like switching a closed position that we lose ago to open a new position at variance with our previous position with reasons the price has moved down.
   On averaging, we're not closing the position that we have been opened (in this case the Open Buy) and we even add a new position with the same direction with the Open Buy again!
   Why? We do not have the Open Buy and previous loss experience, and why we do the Open Buy again? The reason is simple, we hope because the price came down so prices will rise again so that when we perform the Open action Buy the second price move is expected to increase even beyond the Open Buy us first so that we gain.

The three risk management over the very simple and easy to do. So, unfortunately we could lose just because we do not mengatahui things over. But to know whether the three risk management we have never ascertained the loss?

The answer is of course not. If you cermati, a third above the risk management focus on one thing: our ability to analyze price movements. Yes, indeed that is the core of forex trading. Risk management did not even become effective when we can not afford to do the analysis correctly and accurately. Thus, the analysis is imperative to know in starting the investment in forex trading.

If we can apply a risk management discipline with the profit we will soon get. Forex it takes patience, discipline kosistensi and the benefits that come and forex will run from those greedy him. To be the person who wisely if you want to succeed!

Hopefully useful to all of us ..
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