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How to Manage Risk with Price Action  in a Bleeding Market

How to Manage Risk with Price Action in a Bleeding Market

James Stanley, Contributor

Talking Points:

- Markets have started the year with a volatile tone, and many areas feel like we may be on the verge of a potential collapse. But that isn’t enough to just sell and hope, we still have to practice sound risk management, and in this webinar we look at how that can be done.

- Our Traits of Successful Traders research helps traders learn, develop and properly understand risk management based upon the results of actual traders placing real-money trades in the Forex Market. We give this research out for free, please click here to access it.

- We looked at the recent bleeding in the Sterling as GBP is in the midst of jaw-dropping moves against both the US Dollar and the Japanese Yen. Retail traders are heavily buying the move, and this may spell more pain ahead for GBP. You can use real-time SSI to keep track of this sentiment and changes in trader behavior based on market conditions.

It’s been a brisk start to 2016 so far for markets. Last Monday opened up with significant pain from China, and the situation has continued to develop since then with little hopes for respite in view.

This can bring on an odd situation for a trader: There is opportunity, to be sure; but there is also increased risk. As volatility increases, so does variability. There are simply a wider range of options available for what could happen. This could mean lower winning percentages, larger gaps and a higher probability of being slipped in a trade if and when markets show bleeding-like movements.

This is where price action comes in. Traders can utilize price action to look for risk-advantageous setups, even when markets are in the process of melting down.

If you’d like to learn more about price action, please check out our article, Four Simple Ways to Become a Better Price Action Trader, in which we offer a plethora of content on the topic of price action.

--- Written by James Stanley, Analyst for

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