Managing Risk

           Losing is part of trading, and sooner or later you will lose money on
a trade. How you handle risk is the single most important concept a
trader must understand to survive long term. Unfortunately, managing
risk is a confusing topic for many traders. Through my blog I’ve spoken
with traders from around the world who have made the same mistakes I did
as an inexperienced trader; the discussions in this chapter are a response
to those conversations.

           In this chapter you will learn how to use stop orders, avoid overtrading,
size your positions correctly, and manage trailing stops appropriately.
Managing risk is a key principle of bargain hunting because you can’t trade
if you end up losing all your money. Arm yourself with the information in
this chapter and you’ll be prepared to protect your account capital from
the risks of trading currency.