The Sensex and the Nifty are the important index of our Stock market. Both these indices represent market direction and help traders to predict the future price movements of their list of selected stocks in real time.
The Day trading risk level index helps Day traders to reduce risks in their day trading activities.Risks and losses are inevitable in trading. So you should learn to manage risks to avoid losses in trading.
By understanding risks and learning to manage risks involved in Day trading, you can reduce the negative effects of risk on you trading results and by following risk management techniques, you can avoid losses in trading.
- Benefits – you can potentially earn a good return on your investment from selling shares that have gone up in value since you bought them. You may also benefit from any dividends the company you have invested in may pay.
- Risks – if your shares fall in value you can lose money when you come to sell them. Share prices can rise or fall, which makes them more volatile. The potential return from any investment is generally depending to the amount of risk the investor is willing to assume.
There are two common risks that investors should notice them well:
Market Risk: The possibility that the value of financial markets rise or fall.
Inflation Risk: The risk that rising prices of goods and services over time, Inflation risk is also known as ‘purchasing-power risk’ and it is one of the most important factors for long-term investing.
You can’t control the inflation risk, but with a good strategy you can manage and control the affect of market risk on your stocks.
A professional trader always tries to understand and control portfolio risk. Before entering into any trade, good traders first think about how much risk to take and how much risk exposure comes with a particular trade selection. Only then do they allow themselves to think about how much profit they stand to make.
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