Portfolio Management - All you need to know!

To view this article in full screen, click on this link.

✨Portfolio management

It is a way to choose and keep track of investments that match long-term financial goals while maximizing profits and minimizing risks. To go this way, you need to have a good understanding of the market and different investment options and be able to make smart decisions based on analyzing financial data.

You can achieve good portfolio management by understanding three main aspects:

• Money Management
• Risk Management
• Self Management

💰Money Management

When the supply and demand in the stock market are equal, it can be challenging to make the right price trend decisions due to the indecisive atmosphere. It's normal to make some losing trades, as it's impossible to profit from every single trade. Therefore, the main objective in trading is to minimize losses. To achieve this goal, traders can use several simple and trustworthy risk management rules. 

1️⃣The Martingale System

If you have a profitable trade, increase the amount of your next trade. But if you experience a loss, go back to your original trade amount and start again. When using the Parlay system, it is important to set a limit for yourself and determine the maximum number of times you can double your trade amount. This limit should depend on your trading strategy.

3️⃣The Fixed Sum Method

🌡Risk Management?

Risk management is a set of well-defined guidelines to manage the risks associated with trading. These guidelines help you to determine the optimal trade amounts and limit the overall trading volume.

By setting these parameters, you can minimize the risks involved and protect your balance from potential losses.

In essence, risk management is a proactive approach that helps you to make informed trading decisions and use your capital wisely.

🤖The Risk Management System

The risk management system is an automated system on the platform that works without any manual intervention. It works on detecting trades that incur high risks or low liquidity assets and sets restrictions to secure the trader's capital. 

⚠️Limits

(Full size)

Trading limit is a restriction on trading that can be (a day/a week/an hour) for trades on (FTT/Forex/Flex) to secure the traders' capital if the system identified high-risk trades on your account.

The daily limits are updated at 21:00 UTC.

✅Market conditions

When markets are volatile it may be challenging for our liquidity providers and us to hold the situation up, thus the system helps us limit the amount of investment that traders can use to open a position.

🔔Risky Trading Styles

• More than 10% of total funds in your account. Like trading with more than $10 if your total balance is $100.
• Set a trade duration for less than 10 minutes.

🤝Dealing with limits

Our risk management system automatically adjusts the limits based on your trading style. However, when you have limits and you wish to remove or decrease the limits sooner, we suggest opening trades no more than 10% of your total balance per trade, and trading for at least 10 minutes to reduce risk. When our system detects low-risk trades, the limit will automatically decrease or be removed and it may take a few days or weeks, depending on your trading style.

🔁Internal Transfers

Some internal transfers between different currency accounts may be considered risky transactions due to exchange rate fluctuations and having multiple sub-accounts on your main trading account. 

🎯Stop Loss/Take Profit

(Full size)

Using our automated "take profit" and "stop-loss" features gives the power to gain greater control over your Forex trades.

These features protect your invested money and ensure that you secure your trading plans. 

Here's how it works: simply set your desired values for "Take profit" and "Stop Loss". When the "Take profit" value is reached, your profit will be locked in automatically. Similarly, when the "Stop Loss" value is reached, the trade will be closed automatically.

⛔Stop out

It is a feature to automatically close a losing trade, thus your balance from negative value. The Stop Out level shows the amount of investment that should not be within the loss from the trade to remain active and not be automatically closed. And you can easily find it through clicking on "i" icon beside the asset.

(Full size)

(Full size)

🛡Flat Market Protection

We acknowledge the possibility of sudden market fluctuations and want to ensure your investment remains safe from potential risks. With our 'Flat Market Protection' feature, you can receive a refund of your invested amount if the opening and closing quotes of an FTT or Flex deal differ only by one tick.Because simply, the trade result gets canceled if the difference is one tick.

You have the flexibility to turn this feature on or off as per your preference.

FMP activation

(Full size)

To activate the Flat Market Protection feature, please follow these simple steps:

1. Click on the icon in the upper right corner to open your profile.
2. Select 'Settings' and then click on 'Trading'. 
3. In the 'Trades' subsection, turn on the 'Flat Market Protection' feature. 
4. If you want to know more about the feature, click on 'Learn more'.

🧠Self Mangement (Trading Psychology)

(Full size)

Traders' mindset reflects in their behavior. Success depends on emotions towards the market. Anxiety, fear, and greed are emotions experienced by traders. Some helpful, others need control. Good trading psychology = less influenced by emotions. Positive attitude increases success. Greed makes traders stay in a trade too long. Fear makes them cut losses or avoid risky positions.

📝Tips for better trading Psychology

Mastering trading psychology can be achieved by following these tips:

1. Practice identifying market trends regularly.
2. Create a trading plan with clear entry and exit points, profit targets, and trading timings.
3. Minimize risk by using a Take Profit and Stop Loss.
4. Be patient to results and avoid trading with borrowed or non-disposable income.

 

If you found this article helpful, don't forget to hit 👍!