Introduction
Risk management is the key to surviving and thriving in trading. At AviationFX, we don’t gamble — we follow a proven, data-backed strategy that prioritizes sustainable growth over reckless risk-taking.
This guide will teach you
What risk management is and why most traders fail without it.
How AviationFX’s copy-trading strategy minimizes risk while maximizing returns.
How to set up risk parameters for your own broker account.
The ultimate risk hack: Withdrawing your initial deposit and trading only with profits.
By the end, you’ll understand how our traders achieve consistent growth with controlled risk and how you can apply these principles yourself.
Understanding Risk Management in Trading
Risk management in trading means controlling the downside while maximizing the upside. Every professional trader allocates a fixed percentage of their account to each trade, ensuring they never risk too much on a single position.
Risk Per Trade
Professional traders typically risk a small percentage of their account per trade to maintain long-term stability. AviationFX’s standard is set to ensure that even a series of losing trades does not significantly impact the account.
Win Rate & Risk-Reward Ratio
AviationFX Win Rate: ~72%
Risk-Reward Ratio: ~1:3 (Risking a small percentage to make three times that amount)
Overleverage
Most retail traders risk large amounts, leading to quick account blowouts.Emotional Trading
Revenge trading and emotional decisions can quickly escalate losses.No Stop-Loss
Without proper stop-loss strategies, many traders expose themselves to unnecessary risk.Excessive Risk
Trading too aggressively leads to large drawdowns, often impossible to recover from.
How AviationFX Handles Risk Management for You
AviationFX’s strategy is based on calculated risk-taking with verified results, consistently delivering controlled growth while minimizing major losses.
Performance Data (Standard Risk Mode):
Average Monthly Growth: Consistently strong
Risk-Reward Ratio: 1:3
Compounded Growth: A modest initial account grows steadily over time with consistent reinvestment.
Fixed Risk Per Trade: You never risk more than a predefined percentage per trade.
Dynamic Lot Sizing: Adjusts position size based on account balance.
Stop-Loss Enforcement: Every trade has a defined stop-loss, ensuring that no position is left to gamble with.
Key Insight: Traders who risk more than a certain percentage per trade are statistically more likely to fail their challenges in a short period of time.
How to Apply Risk Management on Your Own Broker Account
For those using our copy-trading system, we offer customizable risk management options, allowing copy-traders to maintain some control over their exposure. In your profile, you can set the following parameters:
Total Loss: Set a maximum acceptable loss for your account.
Total Profit: Set a target profit level to lock in gains.
Risk Settings: Set a multiplier to your account.
Floating Loss (Equity Protector): Set a threshold for unrealized losses that will trigger actions.
Keep: Continue copying trades as normal.
Suspend: Pause copying trades.
Unsubscribe: Stop copying trades entirely.
Keep All: Keep all open positions regardless of their profitability.
Close All: Close all open positions.
Close Unprofitable: Close only the positions that are currently unprofitable.
Close All Unprofitable: Close all positions that are currently in the red.
One of the most important settings in your profile is the Floating Loss (Equity Protector), which allows you to set a threshold for unrealized losses that will trigger an action on your account. This feature is especially vital for protecting your capital during unfavorable market conditions.
However, it’s essential to monitor your Risk Multiplier and how it interacts with the Floating Loss setting. If the threshold for your floating loss is set too high, you may find yourself holding onto losing positions longer than you should, which can result in larger-than-expected drawdowns. On the other hand, setting it too low could trigger unnecessary closures, leading to missed opportunities for recovery.
To help you check this out, we’ve created a Risk Calculator specifically designed to calculate what your Max Equity Protector (EP) should be, based on our recommended risk settings and the maximum drawdown you’re comfortable with. This tool ensures that you can fine-tune your profile settings to balance between protecting your capital and allowing for some flexibility in our trades.
Risk Calculator
Choose the right Equity Protection for your account, but make sure to do it wise. Learn how much you should set your EP at.
Our default Equity Protector is set at 10% (while our maximum drawdown is 3% per 1x risk), which corresponds to a maximum risk of 7.5% per 1x risk factor. You have the option to lower it by 2.5%, but be mindful that this could restrict the flexibility of your trades, potentially causing missed profit opportunities if trades require more room to recover.
The Ultimate Risk Hack: Withdraw Your Initial Deposit & Let Profits Run
The safest way to trade is to remove your initial investment once you’ve made a profit. This strategy helps you trade stress-free, knowing your personal funds are safe.
Example Strategy:
Deposit $1,000 → Let it grow to $2,000
Withdraw $1,000 (your initial deposit)
Now, you’re trading risk-free with only profits.
Psychological Edge
You trade without the pressure of losing personal funds.
Capital Protection
Your initial investment is secure.Infinite ROI
By never re-investing your initial deposit, you ensure your capital is protected while you continue to profit.
