Understanding risk and reward
Planning your exit
DailyFX.com, owned by IG Group, is a fast-growing global platform for news and analysis of equities, commodities and foreign exchange markets for retail traders. Over 34 million people visit DailyFX online, on mobile and on social media annually.
In this video, DailyFX.com provides some essential tips for understanding risk and reward when trading.
Since no human can see into the future, new and experienced traders alike will, unfortunately, sometimes have to contend with losing trades.
Emotions can run high during these times. Watching your hard-earned money being depleted from your account is an uncomfortable experience – and it can compromise your decision-making abilities.
That’s why it’s important to decide – right at the outset – where you’ll get out if a trade doesn’t go well.
Lesson summary
- Every trader needs to be prepared to suffer some losses
- Always plan where you'll exit a trade if it doesn't go well
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