Forex Trader Risks: How Onlinemarketshare Broker Helps Reduce ItJohannes Röll 22 / June / 20 Visitors: 389
Risk management is not a unique business process related to the forex market only. Onlinemarketshare, a forex brokerage company, claims the risk management is just a part of the general money management process. However, general money management includes profit-taking, redistribution, and spending. At the same time, risk management is a narrower process that identifies, evaluates, reduces, and mitigates business risks. Simply speaking, risk management is the evaluation of a chance to lose your money and the set of measures to avoid the loss.
How does risk management work in the forex market
The money on the forex market has a double function: it is a payment method and a commodity. Therefore, every forex trader manages money. According to the numerous messages in onlinemarket-share.com review, without the systemized money management process, forex trading turns into a high-risk game with the negative forecast for a player. No player can be lucky forever, and the careless trader is not exclusion. It is known that after the loss, the disappointed trader begins to blame a broker; for example, send the repetitive messages that the Onlinemarketshare broker is a scam.
Trading in financial markets is a high-risk business. Like in every industry, the primary purpose of the forex trading is to earn money to the business owner – a trader. However, the risky environment of the forex market dictates its own rules. In the forex market, it’s not enough to focus on a profit. The trader should learn how to save the profit and the initial investment from a loss. Otherwise, a trader remains with nothing and starts claiming that Onlinemarketshare broker scams.
The risk management on forex starts from two essential actions. First, a trader should set the maximum and minimum amount for one position and the possible number of open positions at the same time. Second, he or she should develop a further strategy depending on the results of the first transactions. Every time the trader opens a new position, it is necessary to determine the affordable amount for risk.
Why should a trader waist time for such calculation before every deal? It’s all about the emotions of the trader. After the first severe profit or loss, a trader can dive into feelings, begin to open positions, in order to compensate the loss. As a result, the total profit of a day or a week is minimal or negative. A disappointment results in the groundless claims that any broker, including Onlinemarketshare, is a scam. Thus, the positive outcome of the trading is not an occasional profit but a ratio of losses to profit. If the ratio is positive, the trader can tell about personal success and mastership.
There are several principles of money management in the forex market. Onlinemarket-share.com review shows that it’s not necessary to follow them all – at least for occasional traders, who’s not planning to make forex trading their primary business. Some traders enter the market for experiments and pleasure. However, the professional trader should act as a following:
- Limit all possible losses, ensuring safety in the market;
- Achieve sustainable profitability at work.
You can notice that risk management takes a higher position in this shortlist than profitability. The reason is simple: to become rich, it is necessary to move forward slowly. You can pursue a large profit and risk with all your money, but the chance of loss is high enough to avoid this.
The successful trader can make 40-200% profitability per year. This is an excellent profit that is higher than the bank deposits, so it looks very attractive. But if you divide 120% for 12 months, you get a little more than ten percent per month. These calculations are provided by Onlinemarketshare broker. Reviews say that many traders neglect the 10% monthly profit; it does not seem attractive enough, because many of them expect to increase their deposit by 120% in the first month of trading. Yes, it is possible. Simple statistics say all months cannot be equally profitable. So the trader has a high risk of losing the profit. In this way, the earnings of one month compensate for the losses of the other. After this analysis, 10% monthly does not look so bad.
The role of a broker in forex risk management
The contract with a reliable broker is a significant step in trading risk management. Usually, when it comes to risk management, a trader primarily thinks about a trading strategy. Managing specific trading risks is impossible without managing common risks. Common risks include:
- problems with the site of a brokerage company
- malfunctions of the trading terminal
- unauthorized access to personal data
- hacker attacks
- failures in the payment system
- interference by an unscrupulous broker.
To mitigate all these risks, a trader must open a trading account in a reliable company. Onlinemarketshare forex broker is a company with a well-deserved reputation among the experienced traders and beginners. The company is registered in Hong Kong and is regulated by the international finance committee. This registration and choice of a regulator ensure that all business processes in the company comply with all international standards.
Onlinemarketshare forex broker hosts its website on a secure hosting. The company’s data center is a powerful separate server located in a specially equipped safe room. A stable temperature is maintained inside the room, and the entrance to the office is guarded. So, the failure of the Onlinemarketshare forex broker site due to server problems is almost impossible. As an additional protective measure, all company data is regularly stored, and the backup file is stored on another server.
Onlinemarketshare forex broker uses the software that also complies with international security standards. The data exchange uses a secure protocol. For its clients, Onlinemarketshare offers the MT4 trading terminal - the most reliable trading solution.
In addition, the protection of customer data is part of business processes. Registration and authorization, confirmation of identity during the funds’ withdrawal, and other security measures help maintain confidentiality. Inside the Onlinemarketshare broker, personal information is not available to employees; only a customer can share it. Thus, the company protects customer data from unauthorized access.
All of these security measures reduce the risk of losing money as a result of a server crash, hacker attack, data transfer interception, and other malicious actions of cybercriminals. Unfortunately, sometimes the brokerage is involved in crimes against clients. As a rule, unscrupulous brokers attract customers with promises of super-profits, and then the trader becomes a victim of scammers. Onlinemarketshare broker is a conscientious broker, whose activities are regulated by the international financial committee. Among other regulations, the committee guarantees the safety and reliability of the company. Working with a good broker is part of risk management in forex trading.
Money management practice in the currency market
Even a novice trader understands that risking with all your money is not safe. If something goes wrong – which is more than possible in the forex market - the trader loses everything. The next step is a disappointment and a new series of claims that Onlinemarketshare broket is a scam. Onlinemarketshare review shows that you can open a position with a maximum of 10% of your money.
Total net profit
This is a technical parameter; the difference between gross profit and loss. If net profit is significant, the parameter sounds pleasant to the trader, because the profit can be withdrawn from the deposit. Also, a total net profit can be used as the indicator of effectiveness for a trading strategy.
This is another technical parameter - the allowable loss level in the specified period. It is measured in the deposit currency.
This is the parameter denoting the ratio of net profit to drawdown, in simpler terms - how many dollars (or other currency) the trader has for each lost dollar. According to Onlinemarketshare review, this indicator should make at least three.
Win to loss ratio
The ratio shows the number of positive transactions to negative. This is a valuable indicator: in combination with the recovery factor, it helps to understand the strengths and weaknesses of the personal trading strategy and minimize the risks of repeated errors.
Onlinemarketshare Risk-Free Program
We have already talked about choosing a reliable broker as a way to mitigate trading risks. Onlinemarketshare broker is not only a reliable broker that carefully saves customers’ money. This company offers an additional risk reduction option for new traders. The essence of the Risk-Free offer is the following: when the client transfers money to the trader’s account in an Onlinemarketshare broker, he or she can activate this option by contacting the account manager. After that, for 10 business days Onlinemarketshare insures the deposit for one or several trades. If a trader loses the money as a result of a risky transaction, the company covers the losses at the expense of the insurance fund.
The Risk-Free program is available for all clients, but it would be extremely valuable for beginners; besides, it only lasts a limited time. Therefore, the trader should study other ways and mechanisms to mitigate trading risks. When the trader switches to the real account, these skills will be helpful. However, for new traders, Onlinemarketshare broker is a reasonable choice for the broker, as the company will help you avoid losing money in the first days of trading.
Training on Demo Account
In this article we discussed theoretical knowledge that will help the trader mitigate risks in trading. However, we know that theory without practice is only half the story. A trader must develop the skills to apply the acquired knowledge for money-making.
Onlinemarketshare broker offers a demo account. This is a special type of account in which a trader uses a virtual deposit without investing his or her own money. Moreover, all movements of the selected assets correspond to the real market. Accordingly, the positions that the trader opens on the Demo Account can be closed at a profit or at a loss, as it would be on a real account. Thus, a trader can put the acquired theoretical knowledge into practice without risking money. However, the Demo account the trader is focused on training and not on the safety of money. If this becomes a habit, after switching to a real account, same behavior can lead to losses.
These rules will help you gain experience in trading and, possibly, achieve success.
Johannes Röll was born 1978 in Brilon,Germany. Graduated RWTH Aachen University. Over the past ten years he worked as Head of the plastic card team, where he was mainly responsible for the development of the distribution, Head of sales Department and Financial Analyst,where he got experience in planning and support sales figures for branches. For the present he works as freelancer