The possibility of making profit is inextricably interwoven with the risk of losses. Initiation of transactions with non-deliverable OTC financial instruments has a high degree of risk and can lead to losses up to the whole loss of deposited margin. Risks warning

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What is risk management?

The vast majority of professional Forex OTC clients and investors agree that the successful completion of transactions with non-deliverable OTC financial instruments is equally based on three factors:

  • Investment system;
  • Capital and financial risk management;
  • Psychology of investing.

Investment system is a sequential set of rules governing a particular strategy, that describes specific entry and exit points and the algorithm of work in the trend and flat market.

Psychology – is the work on negative emotions that arise during transactions with non-deliverable over-the-counter financial instruments and investments. We will talk more about psychology in the following lessons.

Capital management is a part of the Investment system that is responsible for position size, level of margin leverage, tactics of setting orders on fixing the price of the underlying assets of Stop Loss and Take Profit. Proper capital management is a vital task for a client who wants to successfully complete transactions with non-volatile over-the-counter financial instruments for a long time.

If you want to learn more about risk management, sign up for a full-time Forex course from FTM Brokers, and ask your Manager to advise you on various strategies for working with capital

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