Recent questions
Who are Edge Capital Markets?
Edge Capital are one of the leading advisers for Foreign Exchange, Futures, Options, CFDs and Equity based derivatives. Based in Wellington, New Zealand their unique approach to advising and full understanding of the risks of the derivatives markets enables them to educate their clients, support them with trade strategies and to use pre trade risk management tools that empower them to confidently trade in these markets.
What is foreign exchange?
The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.
What is a short position?
A short position is either: 1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value. 2. In the context of options, it is the sale (also known as "writing") of an options contract.
I want to know if there is a formula for risk management when trading futures, commodities, cfd's of forex. For instance how much capital should one commit to trading at the same time 2, 5 ,10 % or what exactly is the standard?
The extent of risk management will very much depend on your risk profile. As a rule of thumb, I would suggest that you do not risk anything more than 3-5% of your trading capital at any one time. The worked out risk amount will then determine your position sizing.
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