5. Risk and Profitability

5. Risk and Profitability

As a professional investor you must learn to see all investment schemes are not always of the profits. There are many other factors besides a beautiful dream profit you should know, and one of them is called risk. Forex is an investment that is classified as high risk-high return investment program.

That means it is a high-risk investment. But also the high profit returns. Yes sebandinglah with risk. Now, both sides profit and this risk can not be separated from each other. It's like a side of the coin next to each other. There is however bersebrangan. Bersebrangan however.

Oke, then let's start talking about two things. Then because I was a willing umbrella before it rains, I will discuss the risks beforehand. This cheerful hope today is not a gray day after you read this article.

Broadly speaking, there are three main things you need to know before starting your forex investments principally from the issue of risk.

First, the total loss possibility (this means the possibility of loss overall) can reach 90% of all the funds that you invest.

Uh, what? 90%? Not so nice as it sounds. Yes it is not so good. But remember this is the worst possible thing that might happen. Why could reach 90%, this is due to the god we know first helper called margin trading. Well not anymore dong god helper ...

Remember when Amir opening a position to buy 1 lot in instances when we learned about the mechanisms of forex investment? Well if you forget, you need to reopen it in the forex trading mechanism.

 

 

Well, now Amir buy 1 lot GBP pair diharga GBPUSD 1.9600. In the case when the GBP strengthened against the USD, the Amir will benefit. Now what if the opposite happens?What if the price goes down? The extent to which the position of Amir can survive?

In forex trading market even though you can open as many as just 1 lot and require collateral only 100 pounds, does not mean that the minimum initial capital deposited is only 100 pounds only (if at rupiahkan yes approximately USD 1.5 million).

Usually brokers establish the minimum deposit above the price of 1 lot. There are some brokers who set the account opening minimum of US $ 250 or even $ 500. What is the point?

Yes! Absolutely, to hold the position if the prices move opposite to the position of Amir.Now suppose Amir start investing with $ 250. 100 pounds (equal to US $ 196) are used as collateral Open Buy position that he did. Then the remaining funds be 250-196 = US $ 54. 54 Dollar Fund is used to maintain the position of Amir open if the prices go down, instead of rising as expected Amir.

In the forex market is usually based currency used is the US Dollar. That means that all transactions will be converted into USD and all listed on the platform is in dollars.

The question now, with the remaining funds 54 dollars, how much Amir can retain its position? And what happens if prices go down and 54 dollars is spent?

Good question.

The answer the first question, Amir can retain his position until the price goes down as far as 54 points because basically 1 point GBPUSD price is one dollar. So if the price drops to 1.9546, then the remaining funds Amir is 54 dollars will be exhausted.

Then what will happen?

If the remaining funds were 54 Dollar Amir is depleted then Amir open positions will be closed automatically by the system due to lack of collateral again in the opening position.By doing so, Amir suffered a loss of 54 dollars and the fund is now the only remaining US $ 196. Poor Amir ....

Amir situation naturally called a margin call. Margin call is the closing position automatically by the system due to exhaustion of guarantee funds owned. An unpleasant thing for a trader. Nightmare precisely.

Now the real question was how long the margin call happens with the remaining funds only 54 dollars? GBPUSD pair belonging couples energetic and happy to move to and fro.With volatility, GBPUSD usually can move up to 100 points per day. So, Amir may experience a margin call and lose $ 54 in just one day!

Wow, that much kah? Yes indeed. Amir could have made 100 dollars a day, but also can experience a margin call if the rest of the funds held just $ 250. Later we will learn further, meskipuin minimum account opening is quite affordable at only US $ 250, open an account with minimal funds it is a high level of risk and is not recommended. Well, money talks and that's right. However capital is not going to lie.

online-forex-tutorial.jpg Tutorial Movie - Risk in Forex

This video gives an explanation of the risks in forex trading

Had Amir start investing with $ 1000 then there is the rest of the funds reached US $ 804, which means enough to withstand the movement several times. It should be noted that the price was never up and down in the direction of the air many times. That means there is a possibility after falling 100-200 price points instead move back up through 1.9600 and Amir gets hit.

So that's how we learned the first risk. Quite bitter indeed.

Furthermore, there is the issue of the risk of liquidity. We have already mentioned a little earlier that for GBPUSD movement to reach 100 points in one day. That means the possibility of profit / loss reached more than Rp 1 million per day!

Well, pa does this mean? It means you can lose your money and experiencing a total loss as mentioned above and everything that happens in a very short time!

Try calm and think about what if this happened to you?

You lose the funds $ 250 in just one day! Or let's say you are saving 6 months to be able to start your forex investment and turns within 6 days all of your savings are gone no trace.Theoretically this may happen in the forex market. Something bitter but real and possible.How would you feel if this happened to you?

So with 2 it can be understood is that the word is true that forex is a high risk - high return investment program. High-risk investment, but also with a high return. And both can not be separated from one another. Never be fooled by the marketing that includes only the profit side without ever alluded to the possibility of loss that may occur. A good forex marketing should also act as an investment advisor for their clients.

The latter is an issue related to risk trading method. If seen look of the two points that we discussed together over the course you also concluded that the decision to take action to buy / sell is the most crucial decision and very significant. When to enter, how long, and buy or sell is a decision that will affect our future funding.

Then the core of all of this is whether we are capable to predict movements in the price or not. Everything is reflected in the analysis that we learn everyday. Trading method, what we use and how we Milki system determines whether you end your career as a trader or a looser.

The bad news is, none of trading methods can guarantee you will experience the benefits continuously. A trading system created by the best forex experts worldwide. This is because a system does not necessarily fit the profile of people who wear them. Yet the problem of capital. Yet how to trade. Not to trading hours. Yet how to analyze. And the most important thing is not to mention that each trader's psychology is different. This causes no single method of trading that can guarantee you are experiencing profit reached 100% continuously.

You can follow the best traders ever know. But it also does not guarantee you a profit.

Well how? It seems forex to be so scary for you? I have yet to tell the stories of those who are "less successful" forex you know J. It would be better never mind. Rather than later BelajarForex.com no longer visited by people again because of fear of risk of forex hihihihi.

But do not worry you, I will not leave you confused face all the risks above. What is presented is the risk of the worst that could happen to your account. Anyway there is a series of ways to prevent it happening to your investment. Here are some things you need to consider in respect of investment risks in forex:

1. Make sure that the funds that you invest the excess funds to be idle / devoted to it (risk capital)

What we mean by idle funds are funds that are "unused" or not used for the specific purposes of urgency. So it is dedicated to investing and on high-risk investments. Ya..ya ... yes I know that there is no money unused. Everything is used. But I mean here is

Do not use the children's education fund or your family's health fund to invest forex. What would you do if your child's education fund sold out for forex? Your child does not attend school due to lack of calculation father ck ... ck..ck ...

One again, it is advisable to not borrow to play forex. I'm serious, you know. There are some people who act too bold by swiping your credit card to play forex. If indeed you are proficient and have the experience of playing forex profit yes no comment at all. But if you then lay still owe ...

Ah never mind. The important thing you have to understand; I mean.

2. Do not rush to invest in real just because you have to understand the two techniques forex.

In fact I still learn and keep learning while this article was made. Do not ever consider myself very proficient in trade just because you've read a "secret recipe" of someone who has undergone forex and profit.

3. Use the demo account for a considerable period before starting a real account.

The brokerage services provider of online forex trading demo accounts usually provide facilities free of charge for anyone interested in forex to practice and get used to using their platform. Privileged demo account is all prices and regulation is exactly the same as the real account. They differ only in the real world of money that we use virtual money aka money ya toy. So theoretically if you experience a profit on a demo account, the profit on the real account is not much more for you.

Well the problem is often even though they try their demo account and profit, time to practice on the demo is not enough. Though brokers usually presents within 1 month (and can be extended) as long as we need until we feel really proficient and ready to the real account. Again impatience made many unnecessary accidents should be happening.

4. Use the Stop Loss and Limit to limit the gains and losses

Stop Loss is a facility provided by the platform to limit losses that might occur in our position when an error occurs in predicting price movements. While useful for determining the limit on the price that we want it taking profit. Both these facilities are generally available on forex trading platform. We will discuss further in section online Forex trading and the Facility at a glance.

Ok we've learned about the potential risks involved in forex trading here are some ways to overcome them. Maybe you start to think twice about forex trading because of the article you just read. Good for you if so. Because it is a destination Learn Forex. Helping you to start investing this in the right way, measured and reasonable.

Surely it is not a draw to discuss risk without knowing how much potential you might get in the trade. Well to be fair we also need to know the extent to which benefits may be obtained by trading forex. But it seems I do not have to explain too long on this.

Well, there are many people who actually trade and benefit to tens to hundreds of thousands of dollars each month. Although more of those losses (many of which should not be loss if they have enough patience and a better way of trading), forex investment remains a field that offers the advantage unlike other conventional investment.

Potential profit on forex can reach tens to thousands of percent per month. Some forex beginners who diligently and fairly well acquainted with us to achieve profit in trading up to hundreds of percent in each month. Sweetheart record their transactions can not we show here because of privacy.

With a simple count based on the moving average of the currency, for example GBPUSD was able to move up to 100 points a day then by installing one lot just a day it means we can benefit in 2000 points within one month (20 days x 100). Pretty good. US $ 2000 if used as Dollar. That's just 1 lot, you know. Try what if we put a lot greater as we get the funds we have? Could be bigger and bigger.

That's why many foreign traders who are trading to finance their life (even their wives and children) daily. Fancy term Trading for a Living. Hmm ... quite tempting is not it? Enough of the house alone and not be necessary to congestion major cities, hundreds to tens of thousands of dollars can we generate just from trading. Thus trading can help the quality of life of those who practice and also reduce pollution on the highway (he ... he ... he).

Try to imagine how the resulting effect if you succeed in making trading formula that is right for you personally. A breakthrough financial (financial independence) becomes part of your life and now you can leave the destiny of being an employee of your lifetime.Hmmm .... Sweet dream eh?

So in fact from what we learned today is known that essentially gains and losses that may occur are comparable with each other. Market can be the best friend for anyone who profit. Instead, he can be the cruellest enemies that you encounter because it can annihilate your investment in a blink of an eye.

Well before you go any further with your lessons. It seems that anyone who wants to invest forex hasuslah one likes an adventure alias price risk lover. If you are a risk averter alias those who do not like risk, please stay away and choose a less risky investments such as forex.