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Risks Management in stock market !



Warren buffet has given two rules ...

1.Protect your capital
2.Never forget rule no. 1
Make sense right ? ofcourse it does . So never forget this two rules and you will have a nice career in stock market.
 Most people say its too risky to Invest or trade in stock market , or they say ‘You will loose all your money’ they are right  
But ,Risks comes from not knowing what you are doing ...So to reduce risk ,learn more ! If you know fundamentals and technicals of  a company and you are getting good signal to buy then you must ! Today most people do trading in stock market !

 Day trading is quickest way to financial suicide . Swing trading is good and long term investment is better ! If you found a good  stock then it is better to keep the stock as long as you can, because compounding is eighth  wonder of world ! And you will get dividends too.

         Just make one good strategy or adopt one good strategy and follow it . .  Now how to do swing trading with proper risk managment , now for that you have to make one rule for you which you will never break in your whole life  that is only risk 2% of your capital not more then that .  Then how to know how much quantity of stocks to buy... Their is one formula for that which is Risk per trade divided by entry minus Stoploss . Suppose your capital  for trading is 10,000 dollars , so now you will only risk 1 % of 10,000 that is 100 dollars in a single trade , than your quantity will be according to the formula with risk as 100 dollars. 

Conclusion:  

  1. always think hard before putting your hard earned money in stocks or any assets.
  2. Make sure you use stop loss in every trade.
  3. Risk only 2% of your capital in one trade.
  4. Diversify your portfolio. 
  5. Learn from your and other MISTAKES


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