Risk management is a very important role as the key to our success, whether in the field of Business, Investment and Trading though, risk management is VERY IMPORTANT!
A person who does not have risk management can become uncontrollable, no hold, and it will be difficult to achieve a success. Because not forever we can be lucky to continue.
As good as any analysis and prediction you, but if not balanced by risk management then the result will be 0 (zero), because not every time we can always be successful, win or profit.
Risk management is useful to anticipate the worst that can happen, because in any type of business or trading will not always be smooth. You must prepare the shield first.
Here is the brief about Risk Management in this Forex trading (can be applied also on trading gold, silver, etc.).
We will explain by taking the example on Forex trading :
Ideally for risk management in Forex is around 3% to 5%
Suppose your Balance capital is $ 10000, The risk you want is 3%, then the risk is 3% x 10000 = $ 300 (or less)
From that example, If your trading position is open with a regular 1 lot volume (which is per point $ 10) then your Profit and Stop Loss targets can be set to 30 pips. But if the volume lot you use is 0.5 lot then TP and SL it is 60 pips.
Alternatively, you can also do step by step, eg 0.1 lot 5 times as Averaging process for TP / SL 60 pips. (As long as the calculation of the risk is still in about 3% to 5%)
TP (target profit) and SL (stop loss) should be larger TP or balanced, so that risk and rewards can be balanced. But if TP is very small and the SL is large (the difference is far adrift) then such trading pattern is not healthy. Because once exposed to SL then the profit you can before can run out.
In addition TP and SL should not be too close (except scalping technique), ideally is above 30 pips to 100 pips. But the determination of TP and SL is also dependent on your trading strategy. (we just explained based on our experience so far and the example of normal implementation)
Do not trade by way of gambling or floating hold loss continue without wanting to be released losers, although it is clearly dragged away once, especially in Forex. Because it is very risky. EXCEPT if you have a specific trading strategy that does not use SL and has prepared a capital that can hold up to the point of maximally.
Another factor is Do not trade with the target should be a percent of a percent in a month especially in a day or a week, because it will actually make your trades become chaotic, because you will be forced to trade blindly if the target has not been met. This can be fatal.
In trading, prioritize Safety First, not target first or look for profit first, but look for a safe way and suppress the risk first. IT IS IMPORTANT YES! after Safetynya can be obtained then the profit will be easy to find, and you can also trade with more calm.
Risk Management that is most important for successful trading, the next factor that determines and must be balanced is how your trading strategy and marketnya analysis techniques.
Remember tomorrow there are many more opportunities, because if today you lose then tomorrow-tomorrow there are many more opportunities to achieve profit. So use this Risk Management wisely as your shield.