Understanding the Landscape of Trading Risks
                     Understanding the 
Landscape of Trading Risks
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Understanding Trading Risks
● Two Key Types of Risk in Trading:
Market Risk
● External and uncontrollable
● Driven by market volatility, news, or economic shifts
Trader Risk
● Internal and controllable
● Originates from decisions, strategies, and emotional responses
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Core Risk Management Tools
Risk-Reward Ratio
● Common ratio: 1:3
● Aim for higher reward than risk per trade
Stop-Loss Orders
● Automatically exit losing trades at pre-set levels
● Protects capital and removes emotional bias
Diversification
● Don’t put all funds into one trade
● Spread across sectors/assets to balance outcomes
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Leverage & Its Caution
Limit Leverage Usage
● Leverage magnifies gains AND losses
● Start with low leverage
● Gradually increase as experience and discipline grow
Why It Matters:
● Using high leverage without control can wipe out capital fast—
especially for beginners.
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Continuous Monitoring & Adjustments
● Markets Change – So Should Your Strategy
● Reassess stop-loss points
● Adjust position sizes
● Update risk-reward expectations
● Stay informed with real-time market news
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Disclaimer
Investment in securities market are subject to market risks, read all the related 
documents carefully before investing. The securities quoted are for illustrative 
purposes and are not intended as recommendations. Brokerage will not exceed the 
SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE 
Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-
MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI 
Registration No. for DP: IN-DP-311-2017-GST Registration number :
33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, 
Nungambakkam High Road, Chennai - 600 034 Email ID: [email protected] - Contact No: 
+91 70100 75500 https://bit.ly/naviadisclaimer
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