Sudden rise in mcx or stock market and sudden downfall has shaken many investors. As we know Risk Analysis is one of the most important System in Stock Market. It is also known as Predictive Analysis. According to various people if u added stop loss in the trade, u have mitigated the loss, but this is not correct.
First we have to understand what is Risk?
Simply it is a perception which can be only perceived. It is very necessary to reassess the Risk profile before making investing decisions. It will help Investors in risk tolerance and Return Expectations.
Various risks are involved in Stock Market:
- Market Risk
- Political Risk
- Business Risk
- Industry Risk
To minimize the Risk it is very important to go for continuing best Revenue Earning Options. Company should have a history of profits and positive cash flows. The Balance sheet should be strong and dividends should be rising. After that Investors have to decide how many shares he should purchase. For that Position Sizing is very important to minimize the risks. Investor can buy more shares if the Stop Loss is narrow Vice versa.
Ultimately risk is risk. If investor does not find suitability in investing, in a certain Company, he should not go for that.
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