Financial Risk
The possibility of losing money, whether from market moves, borrowers not paying, or not being able to…
In plain English
The possibility of losing money, whether from market moves, borrowers not paying, or not being able to sell when you need to.
Financial risk is an umbrella. It includes market risk (prices move against you), credit risk (someone does not pay), liquidity risk (you cannot exit at a fair price) and more.
You cannot remove risk from trading. You can choose how much you take and plan what you will do when it bites.
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