Three ways to manage market volatility

Recent world events have shown the importance of risk management for spread betters. You don't want to get caught in a position that could trigger huge losses when markets are this volatile. So how can you reduce your losses when formerly calm markets turn jumpy? Here are three techniques.

Last week's dramatic stock market and currency swings, triggered by the Japanese earthquake and civil war in the Middle East, revealed the importance of risk management as a spread better. In highly volatile markets you don't want to get caught running a position that could trigger huge losses. So how can you reduce your losses when formerly calm markets turn jumpy? Here are three techniques.

Keep bets small

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.