The Importance of Risk Management and Money Manage 3
The importance of Risk management and Money Management in trading
The meaning of risk management and money management,why is it crucial to investors?
As to begin,the so-called risk refers to the uncertainty of future results, such as the future income,the value of assets ,debt or volatility.In reality,risk exist anywhere, and people spend their entire lives managing risk. Every time when people get on the bus, they may meet accident risk; when they go out in a thunderstorm day , they will meet the risk of stroke (although the risk is not big, but, after all, it is a risk); they may meet medical risk(very rare) or unemployment risk,etc.As a result, individuals could control or manage these risks through buying insurance.For instance, one will buy car insurance in order to avoid large loss from car accidents or stolen;Maybe he has medical insurance, life insurance, enterprise insurance or business insurance; These measures are all kinds of accidents in order to prevent the tragedy of the results, but they cannot eliminate accident. This is what I want to say : the future is unpredictable.
As a trader , there are a lot of secretes if one wants to make a profit in financial markets with comparative lower risk.In particular,money management is one of the most important procedures in reducing risk .While some people define money management as risk control,in fact,fund management include ‘position management’ and ‘risk control’.Risk management and money management mainly focus on the future income and volatility, it directly related to financial market volatility .The ultimate goal of financial risk management andis to control financial risk and prepare disposal scheme which are based on the of the identification and evaluation the possible financial risk, so that prevent and reduce the loss and then make a profit.
Position management including capital varieties of combination, the size of each transaction funds , the raise of commodities, etc.,these
The meaning of risk management and money management,why is it crucial to investors?
As to begin,the so-called risk refers to the uncertainty of future results, such as the future income,the value of assets ,debt or volatility.In reality,risk exist anywhere, and people spend their entire lives managing risk. Every time when people get on the bus, they may meet accident risk; when they go out in a thunderstorm day , they will meet the risk of stroke (although the risk is not big, but, after all, it is a risk); they may meet medical risk(very rare) or unemployment risk,etc.As a result, individuals could control or manage these risks through buying insurance.For instance, one will buy car insurance in order to avoid large loss from car accidents or stolen;Maybe he has medical insurance, life insurance, enterprise insurance or business insurance; These measures are all kinds of accidents in order to prevent the tragedy of the results, but they cannot eliminate accident. This is what I want to say : the future is unpredictable.
As a trader , there are a lot of secretes if one wants to make a profit in financial markets with comparative lower risk.In particular,money management is one of the most important procedures in reducing risk .While some people define money management as risk control,in fact,fund management include ‘position management’ and ‘risk control’.Risk management and money management mainly focus on the future income and volatility, it directly related to financial market volatility .The ultimate goal of financial risk management andis to control financial risk and prepare disposal scheme which are based on the of the identification and evaluation the possible financial risk, so that prevent and reduce the loss and then make a profit.
Position management including capital varieties of combination, the size of each transaction funds , the raise of commodities, etc.,these