Risk

From Traderpedia

Definition:
In any kind of trading, risk can be defined as the probability or possibility of loss of trading capital. Risk is measured in terms of probablity & quantity of exposure to loss.


The probability of financial consequences, or monetary losses resulting from a financial transaction. The combination of the probability of occurrence and the resulting consequence of a specified undesirable financial event.

A high risk investment may stand to delivery high rewards, but also a high possibility of large losses. A low risk investment may deliver small rewards, but also small or no risk of losing any money at all (ie: a bank account).

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