Dwayne Buzzell Blog | Understanding the risk-reward ratios in financial market | Talkmarkets

Dwayne Buzzell

Forex Trader
Member's Links: Forex Trader

An economist, Forex trader and Forex writer, I have a keen eye for spotting international trading trends, particularly since shadowing my mother’s work over the past 20 years with one of the largest fashion groups.


Understanding the risk-reward ratios in financial market

Date: Wednesday, December 13, 2017 9:58 AM EDT

When many traders are losing their money in Forex there are also a lot of traders who are making their fortune. If you look at the market of Forex, you will find that most of these traders only lose their money. They have no strategy and even if they have, they are still losing their money. It is because of their risks to reward ratios which is very important in Forex. When you are trading in Forex, you should know how much risks you should take for your trades. If you are taking 10-dollar risks for your 1 dollars, it is not going to work well. You will lose all of your money when you lost your trades and this is what happens to most of the traders in Forex. They trade with no risks to reward ratios and it cost them their money. This article will tell you how you can save your money from the ever-greedy market of Forex by developing your risks to reward ratios. It is very easy to develop and you will find that your trades make more profit when you are following it. With the right risks to reward ratios, you can have more profit in your market even if you lose more trades than you win.

Spread betting

Spread betting is very much similar to currency pair trading. If you can predict the future price movement with an extreme level of accuracy then you can easily make lots of money. Trading the financial instrument in the global market involves a high level of risk. In spread betting, most of the traders use margin to maximize their potential profit. Though margin trading is extremely profitable yet you should be extremely careful about your risk management factors. If you risk a $100 in a single trade then you need to make sure that your potential gain is $200.To be precise always maintain 1:2 or higher risk-reward ratios to master the art of trading.

Being a new trader everything will be a little bit hard for you. For this very reason, the expert traders in the United Kingdom always suggest the new retail traders open spread betting demo account. In the demo account, you can easily develop your trading system without risking any real money.

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