Every business or something related to finance does have various risks that must be accepted. However, you need to do various efforts to make your business run very well. One that you need especially when it comes to foreign currency is a forex broker. IC Markets is one of the forex brokers that you can use very well.
When using a forex broker means you also have to know the various basic risk management that is in it. Basic risk management is a simple step that will be explained briefly to you who are in need of information.
– Cut Loss
This is a strategy to close a position that is in a loss condition to avoid more losses. You can do this if you have re-analyzed and the price continues to move to the worse. If it turns out your decision to do a cut loss is true, then you have been able to prevent the potential for greater losses. However, if the decision is wrong, then you have prevented yourself from the current losses.
– Averaging
This is an action to open a new position that is sharp with the old position. Although the current movement shows a different direction from your beliefs and predictions. This strategy you can do if you have convinced that the price changes that occur will change in accordance with the predictions made.
– Switching
Simply put, this is a situation where you close a position that is moving inward and causes considerable potential loss. You’ll expect to get a bigger one than the first one. Tips that you do when you do this technique is to open the second position opposite to the first position. Be sure to make the second position beyond the loss of the first position you have closed before. This is to give you a sizeable profit for yourself.