Risk management is often one of the areas that novice traders tend to ignore which is why 95% of traders fail. Risk Management is a set of rules develop to work together with a trading methodology thus creating a consistent trading plan.
There are two types of orders that every trader needs to get familiar with and that’s a stop loss order and a take profit order. You can learn more by watching ActivTrades latest Webinar about stop loss order and a take profit order, just click here.
Get up close and personal with another vital indicator that is risk-to-reward ratio.
Risk-to-reward ratio is all about how much risk we are willing to take for an amount of profit. By entering a trade with 1:3 risk-to-reward ratio, we can take a trading system that is only right 40% of the time and still make money from it.
With ActivTrades SMARTCALCULATOR allows you to quickly identify risk to reward of a potential trade, to simulate different trade scenarios by changing the leverage, or one of the Trade Info elements to understand your potential profit and loss, margin requirements, swaps and more.