Having a stop loss order with your broker is considered the most important risk management tool for successful forex currency trading. A trader can minimize his or her losses by predefining where to exit a position, should the trade not work out as intended. The trader can leave an order in the market with his or her broker, and the order will be automatically executed if the parameters are met.
George Soros is known as “the Man Who Broke the Bank of England” after he made a reported $1 billion during the 1992 UK currency crisis. He bet against the British pound and won big. I came across a quote by George Soros, that seems to give an easy answer as to how the famous speculator makes money in a turbulent world.
It is clear what George Soros does, He evaluates multiple scenarios and takes position in each scenario. As the market unfolds he lets profits run on the correct scenario and cuts losses on wrong scenarios. At a single time he might be long on a position but still take a short position on the same. To play this scenario game you need to use risk management tools such as options, futures and short sales. For this kind of trading to be successful an investor needs to have sufficient capital to buy those tools. |
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