Risk Management Strategies in Forex Trading

Adequate understanding of how to combine the following strategies will
definitely bring about higher profits in forex trade.
1. Price-based strategies:
Here action is based on instrument price. you have to decide at what exact price to exit profitably or at a minimal loss. This strategy should be combined with the equity-based strategy.
2. Equity-based strategy.
in this strategy, the individual trader is concern with the aversion of risk. Here risk is dealt with according to the strength or weakness of the individual trader. Trading with higher risk, moderate risk, or little risk has its advantages and disadvantages. To trade profitably, do not enter one single trade with more than 20% of your account's equity and do not risk more than 2% of your core equity in a standard or 5% in mini account. Core equity is your total account balance minus the amount in the active trade. Lastly, use minimal risk to reward ratio of 1:1, opportunities that offer 1:2 ratio are good.
3. Timed-based Strategy
This strategy involves timing. As a trader, your level of risk should be time based. This strategy should not be used alone, it should be combined with the equity-based strategy. This is because, the strategy is not complete on its own. The strategy requires mental discipline and emotional control. in using this strategy, if you decide to risk 3% of your account's equity in a trade with $2000 in your account - your stop order should be $30. If your stop order has not reached while trading for about
5 minutes, it is better to close the trade at whatever price, profit or loss.
4. Chart-based strategy
This strategy is based on chart formation. That is stop loss orders are placed according to candle sticks chart formation. Decisions are based on candlesticks or bar chart formations.