Forex and stocks, which is safer for beginner traders?
Some people who want to try to plunge in the world of capital markets, whether it’s stocks, forex, or commodities, of course the question that is often asked is the level of risk possessed by these investment instruments. The possibility of losing existing capital certainly affects the choice in investing. The risk of losing investment capital is often a scourge that is quite feared for some people who want to plunge into the capital market business or often referred to as trading.
We need to know that basically investments in any form must have risks, especially financial risks that end in losses. The amount of loss also varies, from the start that causes us to lose some of our small capital to cause us to lose all our capital. But actually the amount of losses that will occur all depends on the way we trade, especially how to manage our risk.
Rick Wright, a trader and instructor at the Online Trading Academy suggested that the greater the risk per transaction is only between 0.5% to 2% of the traded capital.Example if we have a capital of Rp. 50,000,000, – and our risk is set at 2% then the maximum loss per transaction is Rp. 1,000,000, -. That way when we experience a loss, we don’t lose all our capital.
Each trading instrument has its own risk and equally has the potential to make us lose all our capital. But if we master a clear and good trading strategy and proper risk management, any trading in our capital will be safe and get a more consistent profit.