Are You Controlling Your Forex Trading Risk Or Is It Controlling You?

I just wanted to post a quick note to remind us all to make absolutely certain that we control our risk. There have been many exciting trading opportunities this year and I'm certain there will be many, many more. The level of volatility and the strength of the moves of many of the current pairs has truly been inspiring.

During all this Forex trading excitement I've had to remind myself of many of the exact same things I advocate like a broken record. Risk control is one of those things. You see, I've been onboard some of these incredible trends and it seemed like I could do no wrong. Along the way I became too full of myself and the market quickly reminded me who was in charge.

You can't win the game of Forex trading if you don't control your risk because if you don't control your risk you won't be in the game. Obviously, if you are not in the game you cannot win.

Here are a few risk control tips to keep in mind during your trading:

1) When a trade is moving against you and your stop loss is about to be hit do not move your stop to give the trade more room. The market has spoken and is trying to tell you that this trade is over and to prepare for the next one.

2) Risk only a small percentage of your capital per trade. If you risk 50% of your working capital per trade what do you think will happen? Well, you don't have to be a rocket scientist to figure that one out.

It's OK to even have have a piece of paper on your desk that says, "I will control my risk on the next trade and every trade". As simplistic as it may sound, having small reminders like this can go a long way towards keeping you disciplined and profitable.