Trading Knowledge

Expand the knowledge of trading, improve the level of trade, let you trade confidently, in the series of educational articles provided by Pacific Union.

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Risk in any situation is Uncertainty

‘The chance of an outcome being different than expected’

So now that we know what risk is, what exactly is risk in terms of finance?

‘The chance of an investment’s actual return being different than expected’

It’s often said that trading the financial markets is effectively the trading of risk.

Example: “By buying EUR/USD, I effectively have the opinion the Euro will strengthen against the US Dollar”

The risk is the possibility of the Euro weakening against the US Dollar – an adverse movement

In other words financial risk is the possibility of losing part or all of your original investment

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