Forex Risk Management Tips  Forex Brokers Live
                     

• At the bottom of every forex broker’s webpage, there is always a disclaimer that forex trading is risky. But 
that does not mean it is not a good investment opportunity. Forex trading is one of the best ways of 
making money online, though only if the risks involved are well taken care of.
• What does Forex Risk Management involve? It is simply a combination of strategies that traders can use 
to minimize the risk of losing their investment or better put, to maximize their profits.
• Before we get into the risk management tips, it is important to point out that in forex there is always 
losses and profits. There is no trading strategy that is 100% accurate to make only profits every time.
•  A successful forex trading strategy is that strategy that makes more profits than losses so that the sum of 
the two is positive and not negative.
Tips of how to manage forex trading risks
Get a reputable regulated broker
• Choosing a forex broker is always the first step when starting to trade forex. There are lots of forex 
broker scams out there and you should do due diligence to ensure you don’t fall into their hands.
• As such, you should ensure that the trader is reputable; the broker does not have a bad history with 
regulatory authorities, no court cases or bad blood with other traders. You can determine a broker’s 
reputation by going through different reviews online.
• It is also advisable to choose a broker that is regulated. The regulatory authority framework ensures 
that the broker conducts their business within a certain code of conduct that protects the trader’s or 
investor’s interest. And in case you have any disputes with the broker, the regulatory authority can 
always act as the intermediary.
Please read our article on how to identify legit forex
 brokers and scam brokers here.
Always start by using the demo account
• A demo account is an important tool for forex traders.
• Though it is mostly viewed as an account for beginners, it is a great place to test anything before using it 
on the real trading account. If you come up with a trading strategy, you should first ensure that you test 
it thoroughly in the demo account first. If you get an automated Expert Advisor, you should also test it in 
the demo account.
• That way, you will be able to come up with a successful forex trading strategy.
Before placing any trade, it is important to calculate the odds
• You should avoid trading just because you opened the chart and found the market trending in a certain 
direction. 
• At times markets misbehave due to certain reasons and if you are not careful you could find yourself on 
the wrong side of the market especially if there is a news release.
Use of stop levels (Stoploss, take profit, and trailing stop) 
• After calculating the odds, it is always important to use stoploss, take profit or trailing stops.
• Stoploss levels help in avoiding to make huge losses that you didn’t anticipate.
• Take profits and trailing stops ensure that you exit the market once your anticipated profits are hit 
before the market reverses.
Avoid revenge trading
• Always remember there are times to make losses and times to make profits in forex
• If you make a loss, don’t be in a hurry to get back into the market to revenge the loss.