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MACD + Bollinger Bands strong signals
Gives the buy and sell arrows. Applies to all pairs.
Although risk management is one of the easier topics to master, it seems to be the most difficult for most traders to follow. We often see traders turning winning positions into losing ones, with reliable strategies leading to losses rather than profits. No matter how smart and knowledgeable traders are about the markets, their own psychology can cause them to lose money. What could be the reason for this? Are the markets really so mysterious that almost no one can make a profit? Or is it simply a common mistake that many traders tend to make? The answer is the latter. The good news is that although this problem is emotionally and psychologically challenging, it is ultimately very easy to understand and solve. Most traders lose money simply because they don’t understand rink management or don’t take rink management seriously. Risk management is essentially understanding how much you are willing to risk and how much you want to gain. Due to a lack of risk management awareness, most traders simply hold on to losing positions for a long period of time while winning positions for profit too soon. The result is a seemingly paradoxical situation, which is all too common in reality: traders end up with more profitable positions than losing positions, but end up with a negative P/L. So, what can traders do to ensure they have good risk management habits? There are some key guidelines that all traders, regardless of their strategy or the content of their trades, should keep in mind. Most traders simply hold on to losses for a long period of time, but take profits and wins too soon. The result is a seemingly paradoxical situation, which is all too common in reality: traders end up with more profitable positions than losing ones, but end up with a negative P/L. So, what can traders do to ensure they have good risk management habits? There are some key guidelines that all traders, regardless of their strategy or the content of their trades, should keep in mind. Most traders simply hold on to losses for a long period of time, but take profits and wins too soon. The result is a seemingly paradoxical situation, which is all too common in reality: traders end up with more profitable positions than losing ones, but end up with a negative P/L. So, what can traders do to ensure they have good risk management habits? There are some key guidelines that all traders, regardless of their strategy or the content of their trades, should keep in mind. What can traders do to ensure that they have good risk management habits? There are some key guidelines that all traders, regardless of their strategy or the content of their trades, should keep in mind. What can traders do to ensure that they have good risk management habits? There are some key guidelines that all traders, regardless of their strategy or the content of their trades, should keep in mind.
Risk-Return Ratio
Traders should consider establishing a risk-reward ratio for each trade they make. In other words, they should have an idea of how much they are willing to lose and how much they would like to gain. Typically, the risk-reward ratio should be at least 1:2, if not higher. Having a consistent risk-reward ratio prevents traders from entering positions that are ultimately not worth the risk.
Stop-Loss Orders
Traders should also use stop loss orders to specify the maximum loss they are willing to accept. By using stop loss orders, traders can avoid the common dilemma of being in a situation where many profitable trades are made but a single loss is enough to eliminate any profit taking ability in the account. Trailing stops are especially useful to lock in profits. A good habit for successful traders
is to adopt the rule of moving your stop loss to break even as long as your position is as profitable as the risk you initially took through your stop loss order. Also, some traders may choose to close some of their positions.
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