Understanding risk and reward
While new traders tend to think about how much money they can make, those with experience know it’s much more important to focus on what they could potentially lose.
As a trader, you’ll inevitably have some positions that don’t go to plan. But if you prepare for these situations – and respond wisely – they shouldn’t hinder your long-term success.
In this course we’ll run through five simple rules that you can follow to help you manage the risks of trading and maintain your profitability.
Example lesson: setting a stop
In this course you’ll find exercises, charts and illustrations to help you manage your money effectively while trading. To give you a flavour of what to expect, here’s an extract explaining the importance of setting a stop:
Set a stop
Setting a stop reinforces your exit strategy. The resting order will close your position if the market hits the level you specify, even if you’re not logged in to your platform at the time.
It also removes the need for you to make a difficult decision under pressure.
It’s easy to disregard the emotional aspects of trading. But, especially when you’re new to the markets and still learning, the rollercoaster of feelings created by losing a trade can have a substantial impact.