Nov 1, 2015

Article | Controlling Your Forex Risk

There can be a lot of risks involved in forex trading, especially for new traders. However, forex can mean high rewards, just as everything in life, high rewards come with high risks. So when you start trading you should reduce your risk until you understand trading more and can control your risks.

Controlling risk is one of the most important ingredients of successful trading. While it is emotionally more appealing to focus on the upside of trading, every trader should know precisely how much he or she is willing to lose on each trade before cutting losses, and how much he or she is willing to lose in trading account before ceasing trading and re-evaluating.
Risk will essentially be controlled in two ways: by exiting losing trades before losses exceed your pre-determined maximum tolerance (or "cutting losses"), and by limiting the "leverage" or position size you trade for a given account size.

Cutting Losses: Too often, the beginning trader will be overly concerned about incurring losing trades. Trader therefore lets losses mount, with the "hope" that the market will turn around and the loss will turn into a gain. Almost all successful trading strategies include a disciplined procedure for cutting losses. When a trader is down on a position, many emotions often come into play, making it difficult to cut losses at the right level. The best practice is to decide where losses will be cut before a trade is even initiated. This will assure the trader of the maximum amount he or she can expect to lose on the trade.

The other key element of risk control is overall account risk. In other words, a trader should know before start of trading endeavor how much of trading account he or she is willing to lose before ceasing trading and re-evaluating strategy. If you open an account with $2,000, are you willing to lose all $2,000? $1,000? As with risk control on individual trades, the most important discipline is to decide on a level and stick with it. Further information on the mechanics of limiting risk can be found in trading literature.

AGEA is perfect for new traders because it gives you loads of options which can reduce your level of risk. Controlling these factors can considerably control your risk level:
Leverage is a loan provided by the broker to the trader, so that the trade can trade more capital than they have. It is given in a ratio to the amount of money you have to trade. For example a common leverage is 1:100, this means if you put $10 on to trade with, we will make this $1,000. Initially this sounds great, as the higher amount you trade the higher profits you can make, but consequences the leverage can mean higher losses.

“Higher Leverage
Can Mean Higher Losses.”
“AGEA leverage can be
from 1:1 to 1:500”

A lower leverage is the best way to control your risk.

AGEA gives a wide range of leverage to allow you to choose the level of risk which suits you.

MetaTrader4 - 1:1 to 1:500 (initially 1:100)
Streamster – 1:100

Capital
is the amount of money that you invest.
The ultimate risk of forex is losing capital. But you have to start with some money to make money in forex – right? Actually no! AGEA will give you $5 to start trading live – so you don’t need any capital to get started.

If you search the internet for “Forex Bonus” you will find offers up to many thousands of dollars – but beware, these all come with multiple terms & conditions. Most will only give you bonus’ equal to the amount you deposit – so if you don’t have anything to deposit, you’ll get no bonus.

“AGEA will give you
$5 to start trading live”
“No deposit is needed,
no expiry limit,
withdraw whenever.
Simple!“

So you search for “No Deposit Forex Bonuses” – again you will get options, but most have strict conditions on withdrawing profit from these bonus , for example you may have to triple that bonus before you can withdraw any money.

Here are a couple of real Terms & Conditions on “No Deposit Bonuses”
“1. To withdraw your free bonus you need 60 TPoints (trader points)
2. One bonus per household/IP address.
3. The bonus expires in 3 months.”

“You can use the bonus for live trading, but you cannot withdraw it.”

AGEA is different! We have no such conditions. Everyone gets $5 when they open an account, it can be used on MT4 or Streamster, no deposit is needed, no expiry limit, withdraw whenever. Simple!
Spreads
are, basically, the “fee” a broker charges for you making trades. So the higher the spread the harder it will be for you to make a profit.The brokers are themselves charged a spread by their liquidity provider (a Company who sets the forex rates).

So there will never be no spread on a trade, but the excess added to the liquidity providers will depend on the forex broker.

AGEA charges NOTHING extra on top of the spreads charged by their liquidity provider on MetaTrader 4. And has great spreads on their platform, Streamster.

Check out AGEA’s great spreads:

“AGEA charges
No Commissions
or Exchange Fees”

Streamster Spreads...»

MetaTrader4 Spreads...»

Virtual trading

“Practice Makes Perfect”

The best way to become a forex trading expert is to practice. Test out your strategies, and see if you profit. But you don’t want to be practicing with real money, so start with a demo account.

A demo (or virtual) forex account is a simulator of a real forex platform, but you trade with virtual (fake) money.

With AGEA you can open demo accounts with MetaTrader 4 and Streamster. Click to download...»

“AGEA
awards
$100 to the
trader who
makes the
highest
virtual profit”

Now you can make REAL money from trading with VIRTUAL money, through AGEA’s Master of the Month forex contest. Every month AGEA awards $100 to the trader who makes the highest virtual profit (via Streamster). You will automatically be entered when you start trading virtually on Streamster.Click for more information about this contest...»

Education
“Knowledge is Power” – Sir Francis Bacon
Many successful traders use fundamental or technical analysis to predict when currencies are going to rise or fall, and hence when they should buy or sell.

“AGEA has
an extensive
education website
- Why Not Read
a Page A Day?”

You can’t just guess which way a trade will go; you need to understand the currency and what affects it.

AGEA has an extensive education website so you can learn how to get the most from your trades, and plan your strategy. Why not try reading one page a day...»

“24 hour, Multilingual
Live Support,
known for friendly
and helpful assistants”

Support
You definitely don’t want to be losing money because you don’t know how to use the platform right.
AGEA has a 24 hour, Multilingual Live Support, known for friendly and helpful assistants. So any time you have any problems you can contact AGEA Live Support...»

So now it’s time to start trading!..» Open your account and you will receive $5 start-up bonus for live trading plus $10000 for virtual trading. Below is a summary to help you decide which account suits you.

Also Read..» How to choose a forex broker..»

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