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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If trading the financial markets is effectively the trading of risk, then why would we “risk” the market going against us?

Although risk makes us susceptible to adverse movements in the market, risk also presents the potential/opportunity to make huge amounts of money.

Risk = opportunity
The higher the risk, the higher the potential opportunity

The Risk/Reward Trade Off

The higher the risk an investor takes on, the higher the potential returns should be in order to compensate the increased risk. This is known as The Risk/Reward Trade Off

Low Risk = Low Return
High Risk = High Return

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