What did we learn from 2008? If there’s one that we have all learnt from 2008 is that the unexpected can happen. Who would have predicted a 40% fall on most major indexes? Now well most people, but at the start of the year? Not Many

The unexpected happens more than people think? No matter if we are in a raging bull market, or the bears have come out of the woods, we are in the stock market and the unexpected happens. Maybe that’s what we love about the stock market.

The Best traders will always work on the worst case scenario, why, it helps with the risk versus return, therefore increasing our ratio of success.

OBESSION, IT CAN BE A COSTLY EXCERSIE.

When we are trading the market there is always the unexpected happening, terrorism, rate cuts, higher than expected jobless claims, talk of recession, war, companies collapse. This has just been 2008. The list can be endless. Now there is no need to pack everything up and go and hide, but we have to factor in some risk, why to protect our capital.

Without some level of risk management we would be all billionaires.

If you’re holding a stocks or forex, you should be aware of the impact on your portfolio if the company goes into liquidation, what will happen to my money . This is why it is so important that we use stop losses, and where possible guaranteed stop losses, why it helps to protect our capital.

Now if you are looking for a forex broker that uses guaranteed stops then the CFD FX REPORT has recently researched brokers and they have found forex brokers that offer these stops, either visit there website or email [email protected] for more information on who they recommend.

Stock Market will crash, 1987, 1997, the IT bubble of 2000 and now 2008 and maybe 2009.

I am okay, these things don’t happen to me.That’s the way hide your head in the sand

Research has proven that the financial markets are subject to these events, and sometimes it impacts these greater than our lives. The reason that markets become so volatile is human emotion, as when the unexpected happens people will run for cover. When fear is present, people become fearful.

By us preparing for the worst we are in fact protecting ourselves for the future, some of these events don’t happen very often but when they do happen they can have damaging effects. These types of events only happen every so often, and quiet often we can have better times, hence why if we prepare for the worst when the great times come we are ready to make the best of these situations.

Happy Trading