We will talk about the Forex risk management. When you trade on Forex market, the risk management is one important element for success. Forex Risk Management has the distinctive process from Forex market prediction. The main purpose of the forex risk management is to reduce your trading risk and to grow your trading capital safely. To become a successful forex trader, you need to have good skills in determining buy or sell direction. At the same time, you need to have a good risk management skills too. In Optimum Chart, we provide the risk management tool. Like other chart pattern object, you can access the risk management tool from Chart Object menu. This process is the exactly same to add other chart object like AB=CD pattern or Harmonic Pattern or other graphical objects to your chart.
Risk management tool for buy trading entry is the 3 click chart object. This means that you need to click three times in your chart to locate the object. For buy trading entry, the price level of the first click will be the profit target (assuming it is highest). Then, the price level of the second click will be the buy price. Finally, the price level of the third click will be the stop loss price level (assuming it is lowest).
You do not have to locate the risk management tool perfectly right place for the first time. You can always double click the object to modify each price level as well as relocating the risk management tool in another place in your chart.
For example, after double clicking, to adjust the profit target, move the box to anywhere sensible for your profit target. Likewise, you can adjust the buy price and stop loss price by moving the square box. To relocate the entire risk management tool, you can move the thick middle box with your mouse.
For example, say that you want to trade on reversal (=turning point) with the demand zone in EURUSD (Note that this is just a quick example to demonstrate Forex risk management.). You can locate the risk management tool like below. The risk management tool will automatically calculate your reward against your risk. Hence, you know how much risk is involved with your buy entry. What is even better? It will automatically calculate the breakeven win rate. Hence, you know how reliable strategy you need to achieve your profit goal. You can apply the risk management tool to any strategy provided in Optimum Chart including Harmonic Pattern, Supply Demand Zone or Fractal Pattern Scanner and so on. The way to apply the risk management tool for sell entry is exactly the same. You just need to make the 3 clicks in your chart. For the risk management sell tool, the first click will be your stop loss price level (assuming it is highest). The second click will be your sell entry level. The third click will be your take profit target.
Once, you have set this to your chart in Optimum Chart, you might want to receive alert when price hits to the buy price or profit target price or stop loss price. To do so, click on “List All Objects” in the chart pop up menu with the right mouse click. From the object lists, choose the “Risk Buy” object and click on “View Property” button. When the property window is opened, then set “Start Alert” = True to receive alert when each price hits. If you have set your email alert with Optimum Chart, then you can also receive email alert as well as the sound alert. The email alert is handy when you have to be away from your computer. To enable the email alert, you can read the following article.
Further more, once you have set the email alert in Optimum Chart, you can include some personal note in the email alert if you wish. To do so, write any text in the Text input field in the Property Window. In this example screenshot, we have wrote “Hi. This is from John. Just let you know.”. Hence, you will receive this personal note in your email alert too. For example, if your family or friend email address were included in the email list, then this is a great option to let them know that the email alert was sent from you.
Below is the landing page for Optimum Chart for Forex and Stock Market Trading: