What is the Risk for becoming a Trader.

U

uasish

Guest
#21
Just now read a post,1 guy did lots of simmulation to find out the Longest string of good or bad luck in 100 trades.
Well even 20 straight set of Losses can be expected !!.

Imagine somebody thinking that F&O means High Leverage hence my Wins can give me double/triple returns on Equity !! are we aware about the Probability part.

We all trade in F&O ,but where Risk is visible & manageable,No room for wish full thinking,few Winning trades under my belt & i become the Black Belt !! :) :)

http://tradersconsortium.com/community/index.php?showtopic=6894&st=40&#entry9107
 
#24
there is noyhing in the world without RISK.In the trading, unless risk is not taken, no rewards foliow.ONE NEEDS TO BE A WELL DISCIPLINED, DETERMINED AND EMOTIONLESS WHILE TRADING. ONE NEEDS TO FOLLOW ONLY THE TRIED, PROVEN AND SUCCESSFUL TECHNIQUES AND ANALYTICAL SKILLS. A TRADING IN RIGHTFUL MANNER AND IN WELL DEFINED WAY COULD BE AN ART. A WELL DISCIPLINED AND RULE FOLLOWING CASH MANAGEMENT,COULD NEVER FACE A RISK WHICH COULD BE SUDDEN. IT ALWAYS RESULTS INTO A CALCULATED WELL DEFINED RISK.ONCE A RISK/REWARDS RATIO IS PRE DEFINED AND DETERMINED, RSULTANT RISK WOULD ALWAYS BE MINIMAL ANS IN MOST INCIDENCES, LOSS IN PROFITS RATHER THAN IN CAPITALS.
 
#25
Financial risk management is the practice of creating economic value in a firm by using financial instruments to manage exposure to risk, particularly Credit risk and market risk. Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Similar to general risk management, financial risk management requires identifying its sources, measuring it, and plans to address them. Financial risk management can be qualitative and quantitative. As a specialization of risk management, financial risk management focuses on when and how to hedge using financial instruments to manage costly exposures to risk.Finance theory (i.e., financial economics) prescribes that a firm should take on a project when it increases shareholder value. Finance theory also shows that firm managers cannot create value for shareholders, also called its investors, by taking on projects that shareholders could do for themselves at the same cost. When applied to financial risk management, this implies that firm managers should not hedge risks that investors can hedge for themselves at the same cost. This notion is captured by the hedging irrelevance proposition: In a perfect market, the firm cannot create value by hedging a risk when the price of bearing that risk within the firm is the same as the price of bearing it outside of the firm. In practice, financial markets are not likely to be perfect markets. This suggests that firm managers likely have many opportunities to create value for shareholders using financial risk management. The trick is to determine which risks are cheaper for the firm to manage than the shareholders. A general rule of thumb, however, is that market risks that result in unique risks for the firm are the best candidates for financial risk management.
 
#30
There are risks that come up a trader faces before he/she decides to be a part of the trading world. Sometimes,traders put too much risk in what they can’t afford to lose because of lack of knowledge or they put too many eggs in just one basket thinking that particular stock is going to make them millionaire so they invest huge amount of money in that stock and another reason may be the addiction to trade, poor execution risk etc.
 

Similar threads