In the GKFX webinar "The Trading Sessions: Professional Risk Management - If you dare too much, you can lose everything!", the experienced speaker Rene Berteit on August 23, 2018 at 6 p.m. deals with the topic of risk management, Today traders get a lot of information about trading on the Internet, but there has recently been a shift in success-related stock exchange issues. In addition to strategic factors, psychological and risk-technical issues are also in the foreground today.
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Risk-technical aspects are often neglected
However, many private investors and traders still neglect the risk-technical aspects of trading, but there is great potential behind it. Traders who conduct appropriate risk management can increase their success in this way. However, anyone who overshoots the target can run the risk of losing everything. It is therefore important to find a healthy balance here. In this webinar, Rene Berteit also addresses the question of what the many tips for choosing the right position size that traders are given are worth in practice.
Keeping an overview of finances
Risk management includes the tasks of correctly managing your finances and building a balanced portfolio. Traders want to keep their losses under control and keep them as low as possible. Although it is impossible for traders to correctly predict the exact price trend for each underlying, the fundamental analysis as well as the technical analysis provide good clues. This is how traders find suitable entry and exit points. In addition, there are ways for traders to limit their risk.
Choosing the right position size in focus
The individual strategies of risk management are quite different, the The choice of the appropriate position size is often emphasized. This means that traders should determine the maximum amount of capital they want to invest before opening a position. The position size should therefore be carefully considered. This can vary depending on the strategy chosen. The correct position size is therefore a question of the trading strategy, but also of your own risk appetite. In addition, personal trading goals and the investment horizon play a role.
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Distribute capital sensibly
In addition, traders are often advised to distribute their capital over several positions and thus to scatter. In this way, traders who spread their risk across different investments can minimize their overall risk. If you now suffer losses on one investment, you can ultimately compensate for it with profits from another investment.
Traders also get the tip, a maximum limit for losses set. The spread of capital can also be helpful here. The careful determination of the position size can serve to limit its maximum loss. An important question that traders should ask themselves is how much capital they can and want to lose. The answer to this question also depends on whether a trader is more risk-averse or risk-averse.
Risk management as part of the trading strategy
Risk management always fits into your own trading strategy. For this reason, too, traders should plan in advance when to close a position and take profits and limit losses. Orientation can be, for example, a certain predetermined price or reaching a brand.
Brokers support their traders with features on their trading platforms in risk management. Here traders can not only use indicators for analysis, but also set a stop loss. Other order types and limits also help traders with risk management. That is why choosing the right order type is part of risk management.
Set stop loss carefully
However, a stop loss is not a spontaneous decision, but should be carefully considered. If it is too narrow, it may be used too early and prevent further profits. For example, a course can catch up again after short-term fluctuations and continue to develop positively. On the other hand, if the stop loss is set too far from the entry price, losses can be too high.
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Take-Profit- Order to take profits
The take-profit order is also known in this context. A stop loss is intended to limit losses and serves to control risk management. A take profit order has the task of taking profits already achieved. If a certain course level is reached, the position is automatically closed. This can prevent profits that are believed to be lost from being lost because the price does not move upwards but falls instead.
Which order type comes into question depends on your personal strategy. Traders decide on a suitable order type before opening a position. Many traders use a stop loss, while a take profit order is less often used. This type of order is often used specifically for a specific strategy and, incidentally, cannot be used for every strategy.
Both order types can also be combined
Both variants can be executed automatically. A trader does not have to sit in front of the computer continuously and keep an eye on the markets. Some traders combine both forms depending on the strategy. The Trailing Stop, an extension of the stop loss, is also an option. With this type of order, the stop is set at a certain distance from the price. The trailing stop then automatically follows the price.
Always keep capital in mind
As part of risk management, traders should primarily think about the distribution of their capital and plan this carefully, It is important to keep in mind that trading can be about large sums. It is therefore important to always have an overview of how much capital you have invested and how high your risk is accordingly. Again and again it is said that traders should only invest as much money as they can lose without getting into financial constraints.
Modern trading platform from GKFX
GKFX supports its traders in the implementation of their trading strategies and their risk management with intuitive and user-friendly trading platforms. In addition to the well-known MetaTrader 4, which is available as a desktop version, for tablets and for smartphones, among other things, the broker also offers another web-based trading platform. The range also includes a Multi Terminal, via which traders can manage several Meta-Trader accounts at the same time.
Numerous functions with MetaTrader 4
on the trading platforms of GKFX Traders find offers for interactive charting and prices in real time. In addition, numerous tools for technical analysis are offered. Traders who want to trade automatically can use the Expert Advisor and implement automatic trading strategies here. Risk management can be implemented here using precise specifications and setting a stop loss.
Trading platform supports traders in trading decisions
On MetaTrader 4, traders can use several order types for decide a suitable one. In addition to automated trading, traders will also find many indicators. In addition, traders at GKFX can trade equity CFDs, commodities and currencies via the trading platform. Trading is possible on numerous exchanges around the world. Many features of MetaTrader 4 support traders in their trading decisions and careful risk management.
Conclusion: Risk management can be the basis for trading success
Although traders today have a lot of information on the Internet When it comes to trading, many of them still underestimate risk management. In the GKFX webinar "The Trading Sessions: Professional Risk Management - If you dare too much, you can lose everything!" on August 23, 2018 at 6 p.m., traders will find out what potential there is in technical risk factors. Experienced trading expert Rene Berteit also explains which advice is really helpful when choosing the right position size.
Solid risk management is designed to help traders limit their losses where possible. Traders have the opportunity to keep a good overview of their finances at all times and to manage them sensibly. Important aspects of risk management are the diversification of the portfolio and the selection of the appropriate position size. In this way, traders can limit losses to a maximum value, but they can also compensate for losses through profits from other investments.
The options offered by brokers such as GKFX on their trading platforms are also helpful. In addition to numerous indicators for analysis, this also includes order types such as Take Profit and Stop Loss. These help to keep losses low and secure profits. In addition, traders are often advised to choose their position size carefully. In addition to the diversification of the portfolio, this is a frequently mentioned aspect in risk management.
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