Risk management in the world of stock trading means that we must be able to manage investment risk by self-determining the level of risk we can accept.
How to?
Every stock trader will determine a different risk tolerance, many factors affect each individual in determining the level or percentage of risk tolerance. such as age factors, individual character factors, goals etc.
For example, if you have a trading capital of $ 1000, and what you use for trading is only $ 100 (10%) and if you set a risk tolerance limit / loss limit that you can also accept only 10% or $ 10 per transaction, then if the stock price is shows a 10% decline, then you should exit the market or sell your shares.
Because it is influenced by market mechanisms, fluctuations in stock prices cannot be avoided, when there is a lot of fear or a lot of selling, the price will go down, but if you are in a euphoric and greedy atmosphere/buying lots of shares, the price will go up.
There are several ways that traders often do to minimize risk in stock trading, such as implementing a stop loss (SL) or cut loss feature. namely selling shares below the purchase price, with the aim of cutting the risk of more losses if the stock price goes down. but there are also trades that are still holding to wait for the price to reverse.
On the other hand, you can also apply take profit in percentages, for example 10%, so you can set a Target Profit (TP).
How to?
Every stock trader will determine a different risk tolerance, many factors affect each individual in determining the level or percentage of risk tolerance. such as age factors, individual character factors, goals etc.
For example, if you have a trading capital of $ 1000, and what you use for trading is only $ 100 (10%) and if you set a risk tolerance limit / loss limit that you can also accept only 10% or $ 10 per transaction, then if the stock price is shows a 10% decline, then you should exit the market or sell your shares.
Because it is influenced by market mechanisms, fluctuations in stock prices cannot be avoided, when there is a lot of fear or a lot of selling, the price will go down, but if you are in a euphoric and greedy atmosphere/buying lots of shares, the price will go up.
There are several ways that traders often do to minimize risk in stock trading, such as implementing a stop loss (SL) or cut loss feature. namely selling shares below the purchase price, with the aim of cutting the risk of more losses if the stock price goes down. but there are also trades that are still holding to wait for the price to reverse.
On the other hand, you can also apply take profit in percentages, for example 10%, so you can set a Target Profit (TP).
