Any activity on the exchange involves certain risks. With the right approach to work, you can significantly reduce the level of threats. A set of rules to reduce losses on the stock exchange is called risk management.
Here are the basic rules to follow:
- choose a medium-term trend for safe trading;
- it is necessary to buy shares on the rebound at the bottom of the channel, to sell – on the rebound at the top;
- stop loss technique is mandatory;
- the ideal ratio of potential losses and potential profits is 1: 3;
- it is always necessary to work according to plan and to deviate from it only in the most critical situations;
- at the conclusion of transactions, it is required to act systematically and systematically, without making impulsive decisions;
- do not deviate from the capital management plan;
- use risk diversification methods, simultaneously open positions in different currencies, create long-term and short-term positions;
- never make important decisions on the eve of closing;
- all forecasts should be critical, check the statistical data obtained several times;
- Avoid too short positions.
Following these simple rules, you can significantly reduce the threat of large financial losses in the framework of risk management.