If you are trading Forex without first calculating your risk vs reward then you will be joining the other 95% of traders that fail, continue reading this article if you want to be in the top 5%, this will involve planning single trades and sticking to your pre-planned risk before you start.
Understanding the Importance of Forex Risk Management
If you are novice trader, then you might have the experience of initially making some consistent profits, only to have that one bad trade, which eventually wipes out all the profits from those earlier profitable trades. The key to becoming successful as a Forex trader is to find the right balance between how much you risk per trade to achieve the desired profit you are aiming for. Furthermore, this balance needs to be realistic and relevant to the technical strategy you are applying to.
How to Calculate Risk to Reward Ratio
This is where the new Risk/Reward Chart Trading Tool for the cTrader trading platform comes to the rescue.