It seems that an active trading profession is quite enjoyable and at the same time can be very
strenuous. Some people believe that you either have it or you don’t; something they say about
the stock market. Whether you are a beginner or a professional, it is essential to learn to
understand how risk works in the stock market and how to escape it. Here is our extensive
guide on active traders’ risk management and details of the best trading institutes in India with
examples.
Why is risk management so essential for commerce?
It is the identification, documentation, evaluation, and handling of risk factors likely to impinge
on the returns of an investment. Risk management in trading tries to achieve the ultimate
objective—to eradicate possible loss and earn more revenue. There are certain inherent risks to
an active trading strategy, and if these are not managed well, the trader is exposed to stunning
losses that may lead to gigantic losses.
Basic Principles of Risk Management
- Know Your Risk Tolerance: How much fluctuation in your investment portfolio does a given
level of risk tolerance make you comfortable with? In this industry, assessing the individual’s
tolerance towards risk should be determinant before investing in the stocks. With this, it should
help you know the best assets to invest in and your investment plan. - Diversification: This increases the risk of a portfolio since when one investment does not do
well, others can compensate, hence the reason why diversifying an investment portfolio is
advisable. This approach you can use to reduce the effects of the losses and probably improve
the returns of your investment. - Position Sizing: Position sizing is the dollar amount that is placed on the line per working
market operation or trading method. In essence, the risk management strategy involves keeping
the exposure for each position below the size of your account, your intolerant level to risk, and
the fluctuation level of the asset. - Set Stop Losses: A stop loss is an instruction given to your broker that you require them to
sell a particular stock at a particular price. It is useful for managing your losses because once
the market goes against your forecast, you will have the position sold automatically. - Analyze Past Performance: Secondary data, on the other hand, is that we can predict certain
things in the future using past history. Studying markets’ previous behavior will enable you to
discover threats that may occur on the market and make effective trading decisions. - Develop a Trading Plan: A trading plan provides a clear understanding of your objectives to invest, the ways you are going to achieve them, the protection methods from risks, and th signs to sell. This plan, as you may recall, acts like a roadmap of the entire trading process and helps you stay on track.
- Stay Updated: There are many factors, economic, political, and social, that can greatly
influence the market. The better you are at following the news and having the ability to assess
how it may affect your shares, the more rational decisions you make.
Top Trading Courses in India
We have online trading courses in NSE Academy.
The National Stock Exchange of India, in partnership with NIIT Institute of Finance, currently
provides a full spectrum of online trading courses, including NSE Academy for the novice as
well as the expert trader. Among them, there are basic and advanced stock and financial
analysis, construction and management of effective portfolios, and more advanced levels of risk
management.
IMS Proschool’s portfolio of stock market courses
IMS Proschool has courses for stock trading for many stock trading levels: IMS Prograde—a
stock market course that includes equity, derivatives, and currency markets. These courses
offer practical learning and orientation and ensure students have the right understanding of
trading and risks.
Here is an amazing video on stock market courses taught by Kishore Majethia.
Kishore Majethia, a stock market trading teacher, offers live trading classes, and Share Market
Funda is one of them that gives basic to advanced knowledge of trading. The courses he
teaches these fundamental lessons to his students in order to enable them to understand some
of the forces that operate in a particular market and how best to guard against the effects of
volatile forces in that market.
Introduction of Stock Trading Courses Taught in T.I.M.E. Institute
T.I.M.E. Institute provides trading courses relevant to stock trading for the new and experienced
trader. About their offerings, they say they teach students all they need to know about the share
market risks, the basics of the share market, share patterns and trends, and how to manage a
portfolio.
Vortex Option Trading Course
The option trading course offered by Vortex is targeted at derivative products that are gaining
more popularity. Details of options trading, methods for managing risks, and how to manage
capital are some of the valued topics dealt with in the course so as to enable the traders to gain
higher profits than losses.
Free Online Share Market Trading Course By Invest4Sure
Currently, Invest4Sure provides an online share market trading course, which is aimed at
making novices in trading develop their every all right. The type of knowledge contained in the
course includes basic and advanced concepts, including analysis, position, sizing, and
psychology.
Conclusion
Informed trading means awareness of risk management principles and, in more ways, it means
using this knowledge in the trading process. Since there are ample opportunities for traders to
enroll in numerous trading courses in India, traders can hone their skills, build a better trading
plan, and enhance their profitability coupled with their capacity to manage risks. To start with, I
noted that even though trading in the stock market may be seen as a profession, investing time
and money in education can go a long way towards making the trader be successful in the long
run regardless of the number of times they get defeated.
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