Beginning investors do not usually perform risk management on their investments. This is one of the main reasons why many fail.
The most experienced stockbrokers always have an excellent management of their risks because they know that with a simple strategy and even risking less can obtain greater benefits to their investments.
The level of risk that each person will be willing to assume will depend on the level of psychological damage they can accept in the face of one or several failed operations.
Without proper risk management it is impossible to be on the side of the winners for a long time in the stock market.
We have to realize that we cannot introduce the same amount of capital in all operations.
Managing our risks well means adapting each stock operation to your capital amount.
We should not risk more than 8% of all the capital of our portfolio. In this way, knowing the total risk we are going to assume, we can go to sleep peacefully every night.
A winning operator sleeps quietly. He doesn't think if the market will go up or down every day, because he has already assumed the risks he was willing to lose in each operation and in the total value of the portfolio.
