How to Handle Risk in Market Place?

Author: Francisco Mandelbaum

Devise a future-oriented emini trading strategy for yourself, focusing on eliminating risks. Although no trading can be completely risk-free, you can certainly work on minimizing them. Spend more time on practice account doing paper trading until you get proficient in strategy-making.

Trading is just like playing a game that involves strategies, overcoming risks and moving across the board with a clever plan. We have all played this type of game at one point or the other. Well, online futures trading is similar to these types of games where you invest money, manage your risks and acquire profits as you move through the session. You may have heard the saying, 'there\'s profit in risk.' When translated into trading language this means that the less uncertain you feel and the better you manage your risks, the better your returns will be.

You always have to have a strategy when trading because without it your chances of success are slim to none. Your strategy has to have a future oriented goal which aims to reduce the amount of risk you take as well as the uncertainty of a loss. Theoretically, you have to eliminate all risk from your trade to be 100profitable at all times. How do you do this? Well, by buying into winning positions on all trades. However, in the real world it is not possible to eliminate all risk and it will always be a variable to consider in trading. Managing your risk tolerance will make a difference in the success of your trading results. Let us take a look at just how you can go about reducing your risk variable.

Look at your motivation level. If your past performance only makes you focus on the losing trades you made rather than the winning trades then your fear factor increases. You should change your perception by spending more time on your practice account until you see a profitable consistency. Only then do you return to your live account with an invigorated confidence. Your trading errors may affect you psychologically thus affect your risk tolerance and this is why you should take note of all the mistakes you make and develop corrective measures. Find out if your computer is the problem. You may be trading online efficiently but your computer may be doing the damage. This leads to uncertainties in placing exits and entries and your ability to assess risk correctly. Tune up your computer and clean your registries and ensure that you know how to use it effectively.

Do a self-check-up every now and then too. Is greed affecting your online futures trading decisions? Are you able to cut your losses when your stop gets hit? Are you doing the trading as a business or as a get rich quick scheme? Are you still willing to learn, weed out your weaknesses and remove self-doubt? Answering these questions will help in reducing risk. If you invest in yourself and in overcoming your uncertainties and fears, your risk tolerance will greatly improve and you will thus be able to calculate the risk of your future trades with confidence. You will no longer view trading as a huge risk but something that has the potential to make you a good income once you overcome a few challenges.
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About the Author
Author of this article enjoys listening to the CFRN Emini Futures Live Market Commentary each day and also watching the CFRN Professional Emini Traders place live trades in their Live Emini Trading Room.