News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here:
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here:
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here:
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! A look at the levels heading into #FOMC -
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
  • Markets Week Ahead: Euro, Dollar, Gold, S&P 500, Earnings, Inflation Check out @RichDvorakFX's latest market recap and preview plus all the weekly forecasts from the @DailyFXTeam at the link below! Link to Analysis - $EURUSD $SPX #Trading
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here:
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here:
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here:
  • US indices have a packed week ahead with earnings from the major technology names, US GDP data due and an FOMC rate decision. With so much on the docket the potential for volatility is heightened. Get your stock market forecast from @PeterHanksFX here:
Learn to Manage Forex Risk

Learn to Manage Forex Risk

Walker England, Forex Trading Instructor

Article Summary: Traders should look to contain their risk on every position. Learn to exit the market using Risk/Reward ratios.

When traders first approach the Forex market, it is invevitatble that traders will pull up a chart and begin planning their first market entry. However, while most traders are focusing on potential entires, more emphasis should be placed on risk management. Proper risk management allows us to know exactly where we whish to exit the market and have a firm plan to vacate a position in the event price turns against us. Today we will focus on the first step of risk management through understanding Risk/Reward ratios.

Learn Forex –USDCHF 4HR Channel

Learn_to_Manage_Forex_Risk_body_Picture_3.png, Learn to Manage Forex Risk

(Created using FXCM’s Marketscope 2.0 charts)

So what exactly is a risk reward ratio? This ratio refers to the number of pips we expect to gain in profit on a trade relative to what we are risking in the event of a loss. Knowing this function makes controlling risk easy because traders will intuitively pinpoint places to exit their trade. The key is to find a positive ratio for your strategy and implement it every time into your positioning. Let’s look at an example of a positive Risk/Reward ratio.

Above the graph depicts a sample channel trade on the USDCHF. Traders looking to trade a swing would expect to enter the market on a bounce off of the lower line of support near .9580. When setting exits on a channel trade, stops should always be set outside a level of support or resistance. In this example stops are under support near .9465. In the event price declines through this level, we would be expecting to lose 115 pips. To create a 1:2 Risk/Reward ratio we would then need to make at least twice as much in profit on the position placing limit orders at .9810 or better. Now that we know a little about risk reward ratios let’s see exactly why they are so important.

Learn_to_Manage_Forex_Risk_body_trade_pips.png, Learn to Manage Forex Risk

From The Number One Mistake FX Traders Make by David Rodriguez

Traders that are savvy to risk reward ratios ultimately know how to avoid the number one mistake that Forex Traders Make. Through research, FXCMs analysts were able to calculate that while most trades are closed at a profit, losses still far exceeded profits due to traders risking more on losing positions than the amount gained from a winner. This comes from traders using a negative risk/reward ratio and needing a much higher winning percentage to compensate for their losses. In the graph above, we can see that the average profit on the USDCHF is only 44 pips, while the average loss is closer to 90.

This scenario can completely be averted by using at minimum a 1:2 Risk/Reward ratio to maximize profits on winning trades, while limiting losses when a trade moves. By risking 115 pips to make a reward of 230 pips in the trade above, we are effectively inverting these statistics in our favor. Meaning now, we only need to have one winning trade for any two given losers to be break even to net profitable on our trading account.

---Written by Walker England, Trading Instructor

To contact Walker, Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list,CLICK HEREand enter in your email information

Would you like dozens of trade ideas every day with updated charts to identify major levels support and resistance on the currency pair you’re trading?

If so, click here to learn more about our Technical Analyzer on DailyFX Plus.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.