How Trade Management and Stop Losses can Boost Profits?

Trade management is undoubtedly among the most vital factors of profitable trading practices. Most successful participants of online trading in Nepal use logical evaluation to enter the market and have a sound plan that they follow. While most strategies would need the basics of trade management, there are different aspects that one would need to incorporate into his trading system to maximize chances of profit. 

Stop loss

One of the most important elements of management in a trading strategy would be locating a stop loss. Stop losses are meant to be positioned before one enters the transaction, for they could determine the outcome of a trade. This is a critical part of the entire procedure and one would need to position his stop loss within the right range of pips to avail the right outcome. Most novices would place stop loss by just a few pips’ distance in the hope of seeing the price values move in their favored direction. However, this needs to be avoided and a more accurate method of placing the stop loss needs to be implemented for ensuring minimal losses. 

Trading sessions and their impact

Within a single 24 hour day, the online trading market transitions through three separate trading sessions. One needs to be aware of the impact that each of these sessions has on his transactions. Knowing when a new session is about to be initiated is important, especially for someone trading in the London session. 

When you carry transactions over from one session to another, then the alternations of the coming sessions are sure to impact your trade. To guard from this, you can either terminate your trade before heading into the next session, or position the stop loss in an appropriate manner prior to the arrival of the coming session. 

Risk and reward ratios in trade management

Someone unable to make profits would need to re-evaluate his risk and reward ratio. Implementing the right risk/reward ratio helps to optimize chances of success and regulate the risks involved with a particular transaction. A general rule that traders apply is setting a risk to reward ratio of 2:1. This enables them to win more than thirty percent of the time without having their account’s value diminished. 

Conclusion

These are some time-tested techniques any trader can use to enhance his overall trading performance. If you need more help in this regard, then get in touch with leading Forex brokers in Nepal. WesternFX is a leading international brokerage with our headquarters in North America and clients around the world. Team up with is to deepen your understanding of this field and lift profits!

Money Management and What it Means in Online Trading

This article will explore the concept of risk management and money management for those pursuing Forex trading in Nepal. Successful traders earn their edge in this field only with stronger money management skills when compared to the others. Most failures that one goes through in this business could be attributed to a lack of this quality rather than any other. 

The importance of money management 

The problem with most online traders is that they often underestimate the importance of money management and risk management. However, this is crucial in positioning one’s entry and exit in the market, as well as making the right transactional decisions with respect to one’s trades. Money management is a diverse and comprehensive field consisting of a multitude of aspects. This includes managing capital, allocating the right position size, risk mitigation, damage control, regulation of cash flow, equity management, selection of the right transactions and much more.

Relation between money management and risk management

Although these two areas are both interconnected and of equal importance, it is important to distinguish both of them to better understand and apply both of them. Money management would relate to taking the right position size and ensuring the right investment of capital. Meanwhile, risk mitigation or risk management, is more centered towards implementing controls to the outcome and ensuring that the chances of loss are reduced.

Often, the term ‘money management’ could be inclusive of risk management as well. If one takes a broader view of this term, it could spawn a broader approach around the entire forex trading process that includes having the right education and being able to accurately analyze the market, making predictions, etc.

Steps to take:

With money management, one would need to channel his efforts towards maximizing his usage of investment and capital to carry his portfolio forward. The process would include two major steps:

1) Determining what designated fraction of an account’s total equity to invest and to risk on any trade that is conducted in the US Dollar, Japanese Yen or British Pound. 

2) Calculating how many contracts one should hold in his transaction once an entry is conducted. 

If one manages to master these two vital steps, he or she would possibly be more successful at regulating their capital flow and determining positive outcomes on the transactions in the future. 

Conclusion

Many beginners to online trading in Nepal utilize weak money management structures, and this leads to bad performance. One needs to dig deeper and to flesh out better strategies for controlling the outcome of investments. If you require assistance in this area, then get on-board with WesternFX. We are among the leading international brokerages in this scene, with clients across the world benefiting from our quality services. We can show you the path towards better risk management/money management for improving your chances of profit in this space.