Trading is all about managing your risk Building Risk management strategies

Trading any market can be a challenge, and it often test the versatility of a trader but IF you have built up strategies that can help you understand lack of involvement or not too much liquidity or volume behind the moves, then you certainly can ignore various global risks that drives the market sentiment for longer period and that is what happen after "Brexit",Vote where "leave" camp dominates the voting launchpad,but I seriously never expect that much response to those results.

Bring simplicity to the trading and manage your risk properly

I expect the recent failure to close above strong supply is probably is last step towards eating up the remaining sell orders that has been left filled while price makes a large move down and it was the only supply in that range so to react with strongly bullish move price had to react and that is exactly what happened and now after this supply is consumed we can see move towards the earlier high above that 1.3115 area while price left this area and Now because of the low has been tested with even strong demand we can see new buying interest that make a new high above that and that could prove out to be very substantial move as Next area to watch is 1.3279.

Best way to manage any trade

There are numerous trading opportunities available on the table daily and you lookout for high probability trade and after you find one such trade, the next thing you do is to look manage your trade and manage the risk properly. There are not too many traders around who have used Money management as there prime tool to tackle the market and as in result high probability trades turn out to be a losing one.Have you ever try to add new position to your existing profitable one, specially when you trade in strong trending conditions and you think market has offered one pullback and good area to enter the market to make more profit.

Logical way to add another position to your profitable one

IF yes, then how would you mange that trade itself,as I often use to add another position If earlier position has given me 2 times of profit what I use to risk when I enter initially, so that means risking only 1 part of your profit to make more. e.g If you risk one part of your profit to enter at pullback and put the stops at your initial entry and IF in any case you stops get hit, you close that trade at breakeven, but this is the best way to manage your trade of making complete use of your trading plan and logical way to enter and exit the market.

Scaling out your position

Another way to manage your trade is to use "scaling out", which means that you reduce your position size as compare to what you enter initially, but it is not a good idea because it can totally take potential profit as you won't allow so many trending conditions daily and hence make full use when you are given a chance. "Scaling Out" is not a good idea because IF you enter with 2 lots and price moves 100 pips in your favor and you close that trade and again enter with 1 lot with the same stop at the price of your first entry, This seems illogical way to as you there is big chances that market went in your favor (specially when market is trending strongly),another 100 pips and you make much less that your first anticipate and this skills are must to have, If you want to use Money management to cope up with your directional bias.