Best Ways to minimize your share trading risk

Stock Market

We know that you can define risk as the possibility of loss or a situation which involves such a possibility. To put it another way, how much is the risk that you can take against the rewards in share trading.

It would be not wrong to say that while trading in the stock market. You are taking risk of your money when you are buying or selling shares of any company. You may lose some or most part of your money or you may get profit. There are various examples of both the type of people; one, who have lost huge amount and have committed suicide and others. Who has gained huge amount and are living a luxurious life. It could be a tale of rags to riches and also a tale of riches to rags.

Begin with a small amount.

You must always begin trading with a small amount. If you lose small amount then it will not make any dent in your financial life. To put it another way, you should start trading with a small amount of the total capital. That you are ready to invest in future. You can call it a rehearsal or trailer for a three-hour film. You must start in such a way that you can bear initial few losses in a row. We know that a man proposes and God disposes of. Hence, it is not that everything will go exactly according to your plans. It is suggested to assume your risk amount, not more. Than 5 percent of your capital invested in a single particular trade.

Exit script upon mistake.

All of us make mistakes. Therefore, once you realize that you have made a mistake while purchasing a script. Then you must immediately exit that script. You may fall more into the loss trap. If you think you can manage your loss by covering your previous loss. It is recommended not to wait for margin call during the loss. Instead quit the script.

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