Risk Management
Portfolio risk, hedging strategies, and risk assessment
20 articles
Money Management in Trading,The Hidden Key to Survival and Profitability
Money Management in Trading – The Hidden Key to Survival and Profitability Trading is not primarily about finding the perfect entry or predicting the next big move. It is about surviving long enough for the probabilities to work in your favor. The single most decisive factor that separates traders w
5 Critical Things to Know When Trading OTC Derivatives on a Platform
Over-the-counter (OTC) derivatives—contracts such as Contracts for Difference (CFDs), forex forwards interest rate swaps, and credit default swaps—are negotiated directly between parties, typically through online broker platforms. Unlike exchange-traded instruments (e.g., futures on CME or options o
Staying Safe in the Digital Finance Era: Why Phishing Remains the Hidden Risk for Investors and Bank Users
The Hong Kong Monetary Authority (HKMA) has once again sounded the alarm — and this time, it’s a reminder that even the most sophisticated financial systems remain vulnerable to one of the oldest tricks in the digital book: phishing. In its latest notice dated 20 October 2025, the HKMA warned the pu
Broker Reductions on Exchange Futures Margins: The Role of Liquidation Fees in Risk Management
In the realm of futures trading, margin requirements serve as a critical safeguard, ensuring that participants have sufficient capital to cover potential losses. While exchanges like the CME Group establish baseline initial and maintenance margins to mitigate systemic risk, brokerage houses often ex
Mastering Risk in 2025: Essential Strategies to Safeguard Your Personal Wealth
In an era of economic uncertainty, geopolitical tensions, and rapid technological change, managing risk in personal wealth has never been more critical. As we navigate 2025, with inflation lingering, stock markets at lofty valuations, and potential policy shifts on the horizon, savvy investors are p
How to Protect from Romance Fraud: Personal Risk Management Strategies
In an increasingly digital world, romance fraud—also known as relationship scams or “pig butchering” frauds—has emerged as a devastating threat to personal finances and emotional well-being. According to the FBI, losses from crypto-asset-related investment frauds skyrocketed to $5.8 billion in 2024,
What’s Wrong with Value at Risk?
Origins, Pitfalls, Consequences, and Alternatives In the pantheon of financial risk management tools, few concepts have been as influential—or as controversial—as Value at Risk (VaR). Once hailed as a breakthrough in measuring market risk, VaR has since been blamed for lulling banks and regulators i
Risk to Consider Before Investing in Penny Stocks
# Risk to Consider Before Investing in Penny Stocks Penny stocks are the financial world’s equivalent of lottery tickets. They look cheap, they sound exciting, and they tempt you with the dream of turning a few hundred dollars into the down payment on a beach house. But before you go chasing that “n
Ruja Ignatova: The Rise, the Scam, and the Vanishing Act of the “Cryptoqueen”
A Brilliant Ascent Ruja Ignatova was born in 1980 in Ruse, Bulgaria, and moved to Germany with her family as a child. Gifted academically, she went on to earn a PhD in private international law and completed further studies at Oxford. Her early career included a stint as a consultant at McKinsey, wh
Understanding Risk Tolerance and Risk Capacity Before You Invest or Trade
When it comes to investing and trading, everyone talks about “risk.” But risk isn’t just a number—it’s personal. Two investors with the same portfolio can experience very different journeys depending on their psychology, life stage, and financial circumstances. Before putting money into the market—w
How to Avoid Financial Scams in 6 Steps: Trading, Cryptocurrencies, and Platforms
Photo from the U.S. Department of Justice, Bernard Madoff’s sign. We have outlined in six points a method every potential investor and trader should review before opening accounts and depositing money. To protect yourself from financial fraud, ensure the platform is regulated by a recognized authori
The risks of excess leverage in margin trading: diving into negative equity
Margin trading, while providing traders the opportunity to magnify their returns, is a double-edged sword. By leveraging their investments, traders can control larger positions with a smaller capital outlay. But as with most things in the financial world, greater potential returns come with greater
The importance of drawdown in trading and investing
Investing and trading often revolve around metrics such as returns, dividends, and valuations. While these are essential aspects to consider, the concept of ‘drawdown’ holds equal, if not more, importance in assessing the risk and performance of a financial strategy. In this article, we’ll delve int
Due diligence before opening a brokerage account
In the age of digital financial markets and online investment platforms, opening a brokerage account has become easier than ever. However, the convenience factor should not lull potential investors into complacency. Before taking the plunge, it’s imperative to perform due diligence to ensure the int
The impact of El Niño on the international commodities market and prices
El Niño, a weather phenomenon characterized by unusually warm ocean temperatures in the Pacific, has far-reaching consequences beyond its environmental impact. This climatic occurrence significantly influences the international commodities market, leading to fluctuations in prices and supply. In thi
Intro to proactive Risk Management in trading
Successful trading, whether on Wall Street or from a home office, boils down to one fundamental principle: effective risk management. While large hedge funds and proprietary trading firms navigate this essential component with ample resources and sophisticated tools, retail traders may feel outmatch
When Stop Losses can bring a false sense of security in trading
Stop-loss orders are widely used tools in trading that allow investors to limit their potential losses by setting a predetermined level and when this level would be reached their securities will send a MARKET ORDER to be sold. Yes, MARKET ORDER is what the STOP LOSS order activates. The logic is qui
The Failure of the Hunt Brothers in Cornering the Silver Market in 1980
In the annals of financial history, few events have captured the imagination quite like the Hunt brothers’ attempt to corner the silver market. The audacious plan unfolded in the late 1970s, as the wealthy Texas oil magnates Nelson Bunker Hunt and William Herbert Hunt set out to amass a vast fortune
Remember Negative Crude Oil Futures Price 3 Years Ago?
On April 20, 2020, the price of West Texas Intermediate (WTI) crude oil futures contracts for May delivery went negative for the first time in history. This meant that traders were paying buyers to take delivery of oil as they did not want to hold physical barrels of oil due to the lack of storage [
The Importance of Risk Management in Trading and 4 Risk Management Failures
Risk management is a crucial aspect of portfolio management and trading, yet it is often undervalued. Here are some examples of how this can be the case: Overall, risk management is a critical component of portfolio management and trading. By understanding and managing risk effectively, investors ca