Learn to Trade Forex – 16 — Measuring Risk — Part 2
September 13, 2020 at 12:51by K. Prabhu
Managing risk in trading has many different aspects. A good trading plan helps you to identify how much risk to accept in total and how much to take on any given trade.
Overall profitability is not only determined by choosing winning trades. Your winning trades should run longer than your losing trades on average. Your take-profit should be greater than your losses. You should aim for a risk to reward ratio of 1:3, when you see the market is trending. Make sure that your risk per trade is within your risk appetite. You should follow something like a 2% rule for each trade. Protecting your capital is more important than making profits from each trade.
