Risks of stock market trading and how to handle them

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Risks of stock market trading and how to handle them

Post  marketcalls on Mon Jul 30, 2012 4:36 pm

General risks once I was start trading

Market Risk
This is the risk of investing in the stock market in general. It represents a opportunity that a securitys value might decrease.. Although a particular company may be doing badly, the value of its stocks can go up because the stock markets value is jointly going up.. Conversely, your company may be doing very well, but the value of the stock might drop because of negative factors price rises, rising interest rates, political instability etc that are effecting the whole market. All stocks are affecting by market risk.

Regulatory or narrow Risk
Virtually every company is subject to some kind of regulation. It refers to the risk that the government will pass new laws or implement new regulations, which will dramatically affect a business or indirectly a stock market.

Industry or Trade Risk
This is risk that affects all companies in a convinced industry. For eg. Power organizations, are often considered as relatively low in danger because the application market is constant and performs in a foreseen atmosphere with relatively little modify. In comparison, online and other technological innovation sectors are usually considered as high in danger because the market is modifying so easily and unexpectedly. The dotcom percolate rush in the 90s impacted the assessment of all shares in that market.

Business Risk
These are the risks unique to an individual company. It refers to the improbability regarding the organizations ability to perform business or provide service Products, strategies, management, labor force, market share, etc., which are among the key factors investors consider in evaluating the value of a specific company.


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