These threats, or risks, can be fuelled by a wide variety of sources, including geopolitical uncertainty, economic dangers, technical errors, accidents and natural disasters.
As a result, a risk management plan increasingly includes a process for identifying, quantifying and controlling threats to your investment objectives and risk tolerance.
Even an investor with a consistent trading system and good profit target can lose money there for a good risk management plan is essential to protect the investment.
So there are three vital parameters that an investor should incorporate in his risk management plan to have success.
- Risk/Reward Ratio
- Trading accuracy
- Risk Exposure per trade
Now with ActivTrades SMARTCALCULATOR you can quickly identify risk to reward of a potential trade, to simulate different trade scenarios by changing the leverage, or one of the Trade Info elements to understand your potential profit and loss, margin requirements, swaps and more.