Typically managing risk is one of the most crucial aspects of trading, whether you are a beginner or an experienced trader. A proper risk management ensures you protect capital, minimize losses, and increase your chances of success in the long-term.
While trading with Tickmill, managing risk effectively is essential to protect your capital and ensure long-term success. In this article, we would like to offer some actionable tips to help you manage risk while trading on the platform.
Quick insights
Top Tickmill Broker Risk Tips for New and Experienced Traders
Managing risk is crucial for any trader, and Tickmill, like all brokers, offers a variety of features to reduce risk in your trading strategy. Here are some important tips for managing risk on Tickmill:
Using lower leverage
As we all know, leverage can amplify both gains and losses. Based on the account type, Tickmill offers different levels of leverage to the maximum of 500:1 for the retail clients. In order to reduce risk, one should consider using lower leverage than the maximum allowed. Ex: 10:1 or 20:1 depending on your risk tolerance.
Implementing stop-loss orders
Using stop-loss order is one of the most effective ways to protect your account from significant losses as it automatically closes a position when it reaches a certain price. Traders should consider using trailing stops to lock in profits as the market moves in your favor.
Diversifying your trades
There is a common saying that don’t put all your funds into one trade or market. A diversified portfolio is less likely to be affected by the volatility of one single market. Traders should balance their positions by avoiding trading correlated assets at the same time. Expensive mistakes happen when you over-concentrate your risk in one trade.
Using risk-to-reward ratio
Ideally, traders aim for at least a 1:2 risk-to-reward ratio, that is risking 1 unit to gain 2. Before entering a trade, it is essential to evaluate how much you are willing to risk for the potential reward and set your targets accordingly.
Tickmill broker risk management tools
Tickmill offers a guaranteed stop-loss feature and ensures your stop-loss is executed at the set level irrespective of market volatility. Tickmill’s policy of negative balance protection helps you prevent excessive losses in adverse market conditions.
Position sizing
Position sizing is one of the most important aspects of risk management, to avoid risking too much of your capital on a single trade. The general thumb rule is not to risk more than 1-2% of your total account balance on one trade. Tickmill’s position size calculator could help you determine the right amount to trade depending on your risk level and distance of stop loss.
Monitoring your trades
It is essential to stay updated and keep track of economic events and news that could largely impact the markets. Tickmill’s economic calendars and news sources can help traders anticipate potential volatility and adjust their positions accordingly. It is a good practice to review your past trades to learn from your successes and mistakes.
Setting realistic goals
Generally, traders should be realistic with expectations and avoid the trap of chasing unrealistic profits. It is safe to set attainable goals for your trading account growth and stick to a long-term plan. Managing risk means being patient with your trades by avoiding emotions.
Utilizing educational resources
Tickmill offers demo accounts where traders can practice risk management strategies without risking the actual capital. It also provides various learning resources, such as webinars, market analysis, and trading guides, to help traders improve their strategies.
Tickmill’s Security Measures for Safer Trades
Tickmill has always been at the forefront of safeguarding client assets. There are several measures in place, including stringent regulatory compliance, robust finances, vast liquidity, and tight scrutiny of partnering banks.
Below are the few key security features offered by Tickmill:
Regulation and licensing
Tickmill is regulated by renowned financial authorities such as:
- FCA (Financial Conduct Authority) UK
- CySEC (Cyprus Securities and Exchange Commission) in Cyprus
- FSA (Financial Services Authority) in Seychelles
Segregated client accounts
Being a regulated entity, Tickmill must adhere to strict financial standards, including keeping client funds in segregated accounts, which means client funds are kept separate from the company’s operating funds. Tickmill ensures that clients’ funds are held in segregated accounts so that the funds are protected and not at risk.
Negative balance protection
Tickmill provides negative balance protection, meaning you cannot lose more than your account balance when the market moves against your position. This is a very important Tickmill client safety feature, particularly during periods of high volatility and unexpected price movements.
Two-factor authentication (2FA)
Tickmill provides enhanced login security by offering two-factor authentication (2FA) to further protect client accounts. While the security feature requires your password, it prompts a one-time code simultaneously to prevent unauthorized access. This adds an extra layer of security.
Encryption technology
Tickmill employs Secure Socket Layer (SSL) encryption technology to protect sensitive data, such as financial transactions and personal information, from intercepted during transmission. SSL ensures that you’re your sensitive details, such as login credentials and transactions, are encrypted and protected against cyber threats.
Anti-Money Laundering (AML) and Know Your Customer (KYC) policies
Tickmill follows strict AML and KYC procedures to prevent illegal activities such as money laundering and fraud. These policies require clients to verify their identity and financial status before engaging in trading activities.
Regular audits and transparency
Being a regulated entity, Tickmill undergoes regular audits to ensure compliance with financial regulations and maintain transparency in its operations.
Conclusion
Tickmill risk management is not just about minimizing losses, but about preserving capital while giving your trading strategies the best chance to succeed. One should know how to combine solid risk management techniques with a disciplined approach to improve the odds of success and ensure long-term profitability.
By implementing tight security measures, Tickmill works to ensure that its clients can trade securely and confidently, minimizing the risks associated with online trading.
Pro Tip
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