Risk Management and Stop-Loss Orders: Protecting Your Investments
Risk management is the process of identifying, assessing, and controlling risks. It is an important part of any investment strategy. By understanding your risk tolerance and setting limits on your losses, you can protect your investments from significant losses.
Stop-loss orders are a valuable tool for risk management. They tell your broker to sell a security if it reaches a certain price. This can help you limit your losses if the market takes a downturn.
There are a few things you need to consider when setting a stop-loss order. First, you need to decide how much you are willing to lose on the investment. Second, you need to decide what price you want to sell the security at.
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