Risk Management (18)
Risk-reward ratio = (Target – Entry) ÷ (Entry – Stop Loss). A 2:1 ratio means you risk ₹1 to make ₹2.
Close intraday positions, use hedges, or keep stops. Overnight gaps carry extra risk.
Diversify across sectors, set stop losses, and monitor correlations between holdings.
Use stop-loss orders, diversify, and limit each trade risk to 1–2% of your capital. Risk management is essential for survival.
Set a predetermined exit price to limit losses. It can be a fixed percentage or technical level.
Trailing stop adjusts as price moves in your favor, locking profits while reducing downside.
Risk management involves setting rules and strategies to minimize potential losses, such as stop-losses or portfolio diversification.
The risk-reward ratio compares the potential profit of a trade to its potential loss, helping traders assess trade viability.
Systematic risk is the risk inherent to the entire market or market segment, which cannot be diversified away.
Profit booking = exit to secure gains; Stop loss = exit to limit losses.
Profit target = planned exit with gain; Stop loss = exit to limit loss. Both form risk-reward plan.
Appetite = willingness; Tolerance = ability to bear loss. Essential for personalized investing plan.
Risk = controlling losses; Money management = position sizing and capital allocation.
Stop loss = triggers market order; Stop limit = triggers limit order. Protects capital.
Stop market = triggers market order; Stop limit = triggers limit order. Protects positions differently.
Unsystematic risk is specific to a company or industry and can be reduced through diversification.
Structured systems help manage exposure. Tip: BullsWorld systems provide step-by-step guidance.
Protective puts or options spreads. Tip: Options Trading System hedging step-by-step.