{"id":94160,"date":"2016-08-17T11:22:35","date_gmt":"2016-08-17T15:22:35","guid":{"rendered":"http:\/\/countingpips.com\/?p=94160"},"modified":"2016-08-10T11:22:51","modified_gmt":"2016-08-10T15:22:51","slug":"understanding-your-risk-tolerance","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/08\/understanding-your-risk-tolerance\/","title":{"rendered":"Understanding your risk tolerance"},"content":{"rendered":"
August 17, 2016<\/div>
\r\n<\/div><\/div>

By Admiral Markets<\/b><\/p>\n

<\/p>\n

Dear Traders,<\/p>\n

It’s important to measure and manage the risk exposure of a currency pair’s exchange rate.<\/p>\n

Why specifically?<\/p>\n

Because it reduces your account vulnerabilities to major fluctuations, which could adversely affect profit margins and your account.<\/p>\n

Simple right?<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

A common definition of exchange rate risk, relates to the effect of unexpected exchange rate changes on the value of the currency pair or the currency alone.<\/p>\n

Not understanding your risk tolerance, will negatively affect your account – it’s just a matter of when.<\/p>\n

The main Forex risks<\/h2>\n

During Forex trading you will encounter three types of risks:, including:<\/p>\n

    \n
  1. economic<\/li>\n
  2. transactional<\/li>\n
  3. operational.<\/li>\n<\/ol>\n

    Knowing how to deal with these risks, will help you survive in Forex and CFD trading.<\/p>\n

    Economic risk<\/h3>\n

    Economic risk, reflects the risk to the currency exchange rate (caused by various economic factors).<\/p>\n

    Global news and data releases, affect the Forex markets in different ways.<\/p>\n

    Here’s a quick heads-up:<\/p>\n

    …if you don’t follow the economic calendar<\/a>\u2026<\/p>\n

    …you are not prepared.<\/p>\n

    There is no issue finding this information – there are numerous news and data reports, across multiple channels to choose from daily.<\/p>\n

    But understanding which report you need to see, is not so simple.<\/p>\n

    Check-out the following video for tips on how to deal with various data releases.<\/p>\n