Apiary Fund Blog

Minimizing Trading Risk

[fa icon="calendar"] Apr 26, 2019 6:00:00 AM / by Lukas MacMacKen

When it comes to trading, there's a lot of risk involved. Whether it be losing your profits for the day or losing most of your account, there's always a risk in the markets. With risk comes reward, though. That’s why people start trading. The rewards it has to offer. Most people, though, don’t know how to fully mitigate the risk in the markets to increase their rate of success. Apiary Fund reviews with all of its traders ways to help mitigate loss and increase your success in the markets.

One of the ways the Apiary Fund reviews this with its traders is in proper lot size management. Your lot size is the biggest factor in your win or loss amount. While the currency pair you're trading has an effect on the amount you gain or lose in the market, the amount you put into the trade reigns supreme in terms of what you make. Many different strategies will depend on a varying lot size to recover and hedge when a certain position is losing. With this ever-changing quantity and trades being open for prolonged periods at times, keeping track of your positions is critical. One thing to keep in mind when you're going and placing trades is to try and stay below half the total lot size you can use. That way, if you do need to hedge or implement a different strategy, you can do so.

Overtrading is also a very common action that brings a lot of unnecessary risk into trading. What a lot of traders do is they have a good day and keep trading off of that feeling of success and end up losing all the profits and more that were made. While an indirect way in this case, setting a limit for profits for the day can help reduce your risk as well. Once you hit 150 pips, or 2% gains, or any other goal you set for yourself, stopping trading for the day will make it so those profits aren’t given back to the market. A similar strategy can and should be implemented for losses. Seeing consistent losing of profits in a day is commonly a psychological happening. If you start to have consistent let downs, you should stop to prevent further loss which makes your risk lower at the end of the week.

No matter the reason you need to cut down on risk in trading, it 's never too early to develop a plan for when things go bad. It can, however, be too late. The last thing any trader wants is to wake up and see their account drained due to too much risk and not enough planning. On top of the above two risk decreasing measures, there's many more with the most obvious being stop losses.

Stop losses are more of a given than anything, and thus weren’t talked about in extreme detail here. However, just because they aren’t said, doesn’t mean they aren’t worth your time looking into a bit more in your trading if losses are a big portion of your trading. Regardless of what risk minimization method you choose, reviewing the Apiary Fund education and material provided to find an ideal strategy addition can help your trade account from slow growth to a more rapid progression.

Topics: Risk Management, Trader Tips, apiary fund review, learn to trade

Lukas MacMacKen

Written by Lukas MacMacKen

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all

Recent Posts