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Prop Trading: How to Get a Static Drawdown
One of the advantages held by prop firms is the relative drawdown rule. This tilts the playing field in favor of the prop firm as the trader cannot just risk profits, as he/she might do with a broker account, otherwise wise known as ta trading with house money.
Instead, when trading a prop account, whether in the test or funded stage, the trader must be aware that there is a drawdown limit based on the high watermark. This is in contrast to a static drawdown calculated from the initial deposit regardless of how much profit is in ther account. Note. There is a broker offering static drawdowns (scroll below).
Let’s take a look at relative vs. static drawdowns</strong>
BTCUSD – Bitcoin
Supports : 94.500 , 92.500 & 90.750
Resistances : 97.500 , 99.000 & 100 K
Close tonight above 97.500 would be a signal for another attempt at previous high within a day or two.
Any failure to overcome given resistances would push coin into deep correction.
Only barrier between going back to 70K zone is 85.500
Prop Trading: How to Get a Static Drawdown
One of the advantages held by prop firms is the relative drawdown rule. This tilts the playing field in favor of the prop firm as the trader cannot just risk profits, as he/she might do with a broker account, otherwise wise known as ta trading with house money.
Instead, when trading a prop account, whether in the test or funded stage, the trader must be aware that there is a drawdown limit based on the high watermark. This is in contrast to a static drawdown calculated from the initial deposit regardless of how much profit is in ther account. Note. There is a broker offering static drawdowns (scroll below).
Let’s take a look at relative vs. static drawdowns</strong>
Trump Tariffs Strategy: Big Stick Diplomacy?
President elect Trump has not even taken office and he is already impacting markets, the latest being a threat to impose 25% tariffs on all products from Canada and Mexico, and an additional 10% levy on goods from China.
This followed easing market concerns after Scott Bessent was chosen to be then next Treasury Secretary so you can imagine the market reaction when Trump‘s tariff comments hit the wires.
Taken at face value an across-the-board hike in tariffs would have a severe economic impact but is this just the first salvo in “big stick” diplomacy.
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OnlineBroker.Fr is the best resource for French language information on the best online trading platforms and crypto exchanges in France.
https://www.onlinebroker.fr
If you are just starting out with forex trading and you are still searching for an online trading platform to go with, then check out the top online trading platforms in review by business 24-7 Forex traders may find daytrading.com a powerful resource. In addition to the broker comparison tables, it also provides insight and strategy on short term, intraday forex trades.
You may find this useful U.K. Investors may find investing.co.uk a useful resource. In addition to the broker comparisons table, the site also provides detailed reviews, bonus information and strategy articles.
Current and potential Scandinavian currency traders will likely enjoy Valutahandel.se , a website about forex trading in Sweden.
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What is Risk Management in Trading – Forex Forum
For any trader, managing risk is essential to success. But what exactly is risk management? In this blog post, we’ll explore what risk management is and how it can help you become a successful trader.
We’ll also look at some common mistakes that traders make when it comes to managing their risks. After all, if you’re not managing risk appropriately, you’re just a gambler. So if you’re ready to learn more about risk management, read on!
What is Risk Management in Trading?
Risk management is the process of assessing, controlling, and managing risk within a trading portfolio. This involves defining trading goals and understanding potential losses that could occur as part of the trading process.
It also includes identifying potential risks, such as market volatility or sudden changes in the market, understanding how these risks can affect your profits, and taking steps to limit potential losses.
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In general, risk management should be a priority for all traders. By properly managing your risks and using effective strategies, you can minimize potential losses and increase the chances of making successful trades.
Common Mistakes When Managing Risk in Trading
Unfortunately, many traders make mistakes when it comes to managing their risks. Here are some of the most common mistakes that traders make when it comes to risk management:
Not Setting a Trading Plan:
Many traders don’t have a detailed trading plan, which is a key component of risk management. Without a trading plan, traders are more likely to take risks that could have otherwise been avoided. It’s important to establish clear trading goals and a plan for how to reach those goals.
Not Understanding Risk:
Many traders fail to understand the risks associated with certain trades, which can lead to serious losses if they don’t take the time to research and understand the risks involved. It’s important to have a thorough understanding of the markets you’re trading in before taking any risks.
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Not Taking Advantage of Stop Losses:
Stop losses are an essential component of risk management, as they help to limit potential losses in the event of a market downturn or sudden changes in the market. However, many traders don’t take advantage of stop losses and end up taking larger risks than necessary.
Over-Trading:
Over-trading is a common mistake made by many traders. This involves taking too many trades, which can lead to losses if the market turns against you. Look, all traders love the price action. It’s exciting to take a position and watch your P/L go up and down. But don’t become addicted to the price action for the sake of just having a position. It’s important to only take trades when the setup is right and avoid over trading.
Not Diversifying Risk:
Diversification is another important part of risk management. By diversifying your trades, you can spread out risk and limit potential losses if the market turns against you.
Why is Risk Management Important in Trading?
Risk management is a critical factor in success when trading in the markets. It involves understanding and controlling what could potentially impact your trades and actively analyzing scenarios that may occur.
Without proper risk management, traders are leaving themselves vulnerable to potential losses which could be catastrophic for their investments.
Good risk management also allows traders to effectively assess opportunities and make better decisions that take into account volatility or leading indicators of future market performance.
Simply put, risk management can provide peace of mind so traders can enjoy the highs of profitable investments while minimizing losses when markets start to dip.
What are Some Common Risk Management Strategies?
Common risk management strategies used by traders include setting stop-loss orders, limiting capital exposure, and diversifying investments to minimize volatility.
Another essential approach for traders is to set predetermined targets for both profits and losses to help stabilize your exposure. To further limit potential losses and maximize gains, traders should always be aware of economic news and other world events that might affect the market.
How to Implement Risk Management in your Trading Plan
Implementing effective risk management into your trading plan is incredibly important for successful and profitable trading. It can help you to control the amount of draws you take in any given trade, and it can also protect against large losses which could potentially wipe out your entire trading account.
A good risk management plan should include determining the amount of capital at risk on each trade, setting predetermined stop-losses to limit downside exposure, and having a strict, disciplined approach towards minimizing losses:
never increasing position size
never risking more than you are comfortable with, and always controlling potential risk-reward ratios.
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Taking the time to set up a comprehensive yet flexible risk management plan will put you in a better position when it comes to positive returns in the long run.
Risk management is an important part of trading. It allows you to trade with less stress and more confidence. There are many different risk management strategies, so it is important to find one that fits your trading style.
Proper risk management can help you make money in the long run by preserving your capital and preventing you from making careless mistakes.
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