Risk Management on Stock Trading

The risk is not that you do not know the results of your activity. At the same time, it is true that the source of our income lies in the ability to take risks. Business, they say, is another word for risk taking. For every investor, risk is a fact of life.

For example, "safe" is bank deposit because interest income is unable to hit the inflation rate. In financial matters, the risk may occur as a risk of uncertainty. This is a kind of deviation from normal norms.

They say that the more risks you take, the more income you get. The deeper you dive into the ocean, the more valuable gems you find. The possibility of gains from the investment also involves the possibility of losses. While this argument is very true, risk taking can not become a gaming game.

You can not work in the state of fear and insecurity. The protection against surplus losses in stock exchange trading is called risk management.

The risk of stock market trading is primarily attributable to unpredictability or volatility of the stock market. Do not you know when the price of your stock will drop? You have to live and work with the unknown unknown anxiety and fear.

A cunning stockbroker takes risks and takes precautionary measures to reduce losses. You should not dive into the ocean without saving your protective equipment.

Risk Management, first, understands the understanding of the risks and then measures them against them. Appropriate assessments of market risks and the level of uncertainty surrounding them. If you understand the nature of the risk and the level of tolerance, the risk of risk is significantly reduced.

Here are some examples of risks that are inevitable escort of stock trading.

The sudden "crash" of the stock market price is often referred to as an example of risk. However, the consequences of accidents differ from the investor to the investor.

Suppose you bought $ 100 per share. Its value rose to $ 200 for 15 months. Sudden correction was made in stock prices. For example, her stock price dropped to $ 50. It has collapsed for you.

On the other hand, if your stock price substantially exceeds the purchase price and falls a bit, then there would be no collision for you.

In another example, inventory prices have increased significantly on the purchase price. Then news in the media gets a strong and immediate fix. There is a kind of stalemate among shareholders in the sale of shares. Obviously, the price of shares will decrease. The next day, the correction will take place, but far from the possibility of a potential collapse. It was like a straw that struck the camel.

How can you manage your risk of equity trading?

first The first and most important step is to diversify the portfolio in stock trading. Do not put all the eggs in a basket. If you lose a set you win the other. The loss goes to some extent.

Diversification means not only investing in different stocks, but also investing in various investment plans. For example, invest in ETFs to redistribute investment plans – DRIPs-designed investment plans, retirement plans and educational plans, etc.

2nd Price fluctuations are characteristic features of stock exchange trading. It must take a long-term horizon for investment. It has been found that the upward and downward trend in stock prices, which are almost daily, the value of good quality stocks increases for some time. Patience and patience are the odd virtues of stock market trading. Do not let the heartbeat quickly or slowly collide with any increase or decrease in your inventory.

3rd If you are a short-term investor, you must learn to reach your goal to gain the investment. For example, you can improve your return on investment by between 10% and 20%. As stock prices rise at this level, they have to sell their stock, even if the price seems to be on the roof. Do not take the greed to reduce the investment to twice or higher before deciding to sell it. The price of a stock can collapse at any moment if you manage your dreams to dust.

Source by sbobet

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