Trading risk management refers to how to manage trading risks during the trading process, The management process of minimizing the potential adverse effects of risks on holdings in a volatile investment environment, Details include measurement and assessment of risks, The strategies for dealing with risks will all be related to this. Trading risk management is crucial for foreign exchange, futures, and stocks, Because when investors fail to manage the overall size of their positions, the number of lots per order, and stop loss/Take profit setting, use of leverage, personal trading strategy planning and continuous execution, etc, All of them may have a negative impact on the net asset value of the account.

To effectively manage market risks, Firstly, before each transaction, Reasonably analyzed the relevant trading ideas, Including trading logic, setting profit taking and stop loss positions, the ratio of the number of orders placed to the overall net asset value of the account, the ratio of leverage, etc. If all the above situations are well planned, In most cases, A single transaction in market volatility will not cause significant losses to the position. Sometimes investors encounter black swan market conditions, Abnormal large fluctuations in the market, The occurrence of a gap leads to the price or inability to close the position at the stop loss position, So keeping sufficient funds in the trading account is also a risk control point that every investor needs to pay attention to.

After establishing a position, Customers can often pay attention to whether the funds in your trading account can remain above the maintenance margin level, And maintain a certain percentage above the level. Because when the price moves in a direction that is unfavorable to your position, You must provide sufficient additional margin, To maintain the current position level. If you are unable to provide additional funding, You will need to close one or more trading positions, To reduce the maintenance margin required for the account.

When maintaining insufficient margin, Customers must meet Mitrade Issued to customers「Notice of Additional Margin Deposit」requirement, If the relevant requirements are not met, Mitrade Have the right to take compulsory liquidation actions against individual clients.

Apart from market fluctuations that can have a significant impact on your position, Another thing you need to pay attention to is the risk of business operations. Your communication network, mobile phone, Computer and other devices being blocked or other external events may cause delays in your transactions, Mitrade We will not be held responsible for any operational processes related to our clients, Unless the delay in the transaction is due to Mitrade Due to errors, negligence, or dishonesty, It's another matter. Customers should ensure network security and stability, Trading should only be conducted when the trading equipment configuration is normal.

Another common source of risk is foreign exchange risk. Valuation currency for trading products, Not necessarily equal to the customer's domestic currency or account base currency, So customers also face the risk of exchange rate fluctuations between two currencies during transactions.

So the client wants to avoid significant losses on a single transaction, You can determine the stop loss before each transaction. Therefore, the first approach to risk control is, Assuming this transaction fails, Firstly, identify the price level that can prove your idea wrong, Then set the stop loss at this level.

Emotional dominance is also a major reason why investors often suffer long-term losses.

For example, say, Some investors use self-made, And trading strategies that have undergone historical backtesting, Implement it in buying and selling, But they planned to close their positions early because they felt the market fluctuations at the opening every day, Failed to effectively execute the originally complete trading strategy, What a pity.

And this will seriously affect the long-term profit and loss ratio of investors executing the same strategy, This is a typical negative impact of emotion driven trading. Methods for correction include limiting small positions to personal emotional fluctuations, and even temporarily replacing trading with simulated accounts, Continue trading with a real account until the performance stabilizes.

Leverage is a double-edged sword, If used appropriately, Investors can definitely use leverage to achieve the goal of earning high returns with small amounts of capital. But at the same time, if the trading strategy is inappropriate, Or operate with high leverage but have long-term insufficient funds in the account, It will also significantly increase the chance of account liquidation.

There are two suggested methods for this, first, Have confidence in trading strategies, Trading can be operated directly with relatively high leverage, And for trading strategies with lower confidence, You can deposit more funds into your account to enhance its security. second, Try to set a ratio of margin to account net asset value for your overall position, New positions can only be opened when the specific ratio is not exceeded, To avoid serious losses caused by high leverage operations.