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Efficient management of risks is extremely important for continued success in stock market investing. A lack of such expertise and failure to abide by the critical risk management principles can often lead to disappoint in terms of not just the returns but can have a potentially negative impact on your future investment behavior too. However, without risks there are no returns and a careful and articulated risk management strategy can help wonders for the investors. In fact, many a times, how an investor managers risks efficiently would help him race ahead. Here are five critical factors you should keep in mind to help mitigate risks wisely.
Remember that risk and return are two sides of same coin: Risk and return are the two sides of the same coin and a careful balance needs to be maintained between both. It is important to keep strict stop loss on your trades and ensure that a loss does not affect your next trading decision. A sound blend of such discipline would definitely help you in managing your trades effectively. A measured approach to risk and returns and an unemotional and rational mind are key to long term success in investing.
Pay attention to key market information and news updates: While it is not expected for an average investor to be an expert in economics or finance, keeping abreast of the latest developments helps a lot. Typically, any website of a share broker online offers plenty of news updates and research reports to provide useful knowledge and information in this regard.This would help you understand the reasons behind major market movements and would also help in providing an idea about the trajectory of various stock prices.
Read the entire article here: https://www.ajmeraxchange.co.in/blogs/five-tips-for-managing-trading-risks-wisely