Category: 05. Risk Management

Risk/Reward Ratio Definition

What Is the Risk/Reward Ratio? The risk/reward ratio marks the prospective reward an investor can earn for every dollar they risk on an investment. Many investors use risk/reward ratios to compare the expected returns of an investment with the amount of risk they must undertake to earn these returns. Consider the...
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Risk Management Techniques for Active Traders

Risk management helps cut down losses. It can also help protect traders’ accounts from losing all of its money. The risk occurs when traders suffer losses. If the risk can be managed, traders can open themselves up to making money in the market. It is an essential but often overlooked prerequisite to...
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Market Risk

What Is Market Risk? Market risk is the possibility that an individual or other entity will experience losses due to factors that affect the overall performance of investments in the financial markets. KEY TAKEAWAYS Market risk, or systematic risk, affects the performance of the entire market simultaneously. Market risk cannot be...
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A Guide to Day Trading on Margin

Margin allows traders to amplify their purchasing power to leverage into larger positions than their cash positions would otherwise allow. By borrowing money from your broker to trade in larger sizes, traders can both amplify returns and potential losses. Day trading involves buying and selling the same stocks multiple...
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