Risk Management

Risk management is one of the most important topics you will ever read about trading.
Why is it important? Well, we are in the business of making money, and to make money we have to learn how to manage risk (potential losses).
Ironically, this is one of the most overlooked areas in trading.
Many forex traders are just anxious to get right into trading with no regard for their total account size.
They simply determine how much they can stomach to lose in a single trade and hit the “trade” button.
There’s a term for this type of investing…. it’s called… GAMBLING!

When you trade without risk management rules, you are gambling.
You are not looking at the long-term return on your investment. Instead, you are only looking for that “jackpot.”
Risk management rules will not only protect you, but they can make you very profitable in the long run. If you don’t believe us, and you think that “gambling” is the way to get rich, then consider this example:
People go to Las Vegas all the time to gamble their money in hopes of winning a big jackpot, and in fact, many people do win.

In the end, forex trading is a numbers game, meaning you have to tilt every little factor in your favor as much as you can.
In casinos, the house edge is sometimes only 5% above that of the player. But that 5% is the difference between being a winner and being a loser.
You want to be the rich statistician and NOT the gambler because, in the long run, you want to “always be the winner.”