(1) Policy risk. Eg: on 24/sep/14, indian supreme court declared all coal mining blocks as illegal. So stocks of all coal mining companies fell drastically. No solution.
(2) Price risk. You bought stock thinking that price will go up and you can sell at a profit. But it didn't go up. Solution : Stop loss.
(3) Exchange rate risk in currency. Solution : Hedging.
Like that so many.
OK
Market Risk...This is the risk of investing in the stock market in general. It refers to a chance that a security’s value might decline Although a particular company may be doing poorly, the value of its stock can go up because the stock market value is collectively going up Conversely the value of the stock might drops because of negative factors inflation, rising interest rates, political instability etc.
Price flotations
Government rules and regulation
Foreign exchange rate changes
Market risk
Electronic active trading involves special risks and may not be suitable for everyone. Electronic active trading may also involve a high volume of trading activity.
Unless you need the money, there is no risk. You buy a stock and you never have to sell it at a loss. Either the price will eventually go above what you paid for the stock or you will die.
Every successful business has a risk management plan. And stock Trading is a business! Here is how to manage risk when trading stocks.
1. Cover your expenses every month.
2. Base your stock trading business philosophy upon 3 principles (in order of importance)
3. Preserve capital and money management.
4. Define your risk.
5. Be aware of emotional trading.
6. Focus on being the best.
If you have any more detail you can go on this link:-
You get stolen.
He/She snatches your clients.
high
