In This Chapter
Understanding the biggest risk of trading
Working with leverage and margin
Avoiding the overnight gap
Taking a stance against technology and exchange-based risks
Being prepared for trading crises
Trading is risky. You’ve probably seen (and hopefully actually read) disclaimers when you signed up for a brokerage account, trading software, educational courses, data feeds, and so on. Such statements are so prevalent that they’re almost impossible to ignore, yet many people don’t take them seriously. You should definitely take them very seriously.
Being fully aware of your risks in trading at all times is absolutely critical. A common sentiment in the trading world is that amateurs focus on making money, while professionals focus on managing risk.
In this chapter, you discover some of the most common risks of trading and what to do about them.
Although you may not want to hear it, traders ...