How to manage your risk

Risk Management Once you have the facts it is decision time. You can choose to do nothing or seek to reduce the exposures or to hedge them in whole or in part. The unforgivable sins are to fail to consider the risks or fail to act on any decisions. The risk culture of your business is critical and must be established at the most senior level. Above all it calls for honesty. Too often individuals are criticized for decisions that, at the time, were in tune with the organization’s perceived appetite for risk. But it is never easy to set down effective guidelines and the range of exposures for even a simple transaction can be extensive. For...

How to manage your risk(Ask yourself)

 Ask yourself… 1- Can the risks to your business be identified, what forms do they take and are they clearly understood - particularly if you have a portfolio of activities? 2 - Do you grade the risks faced by your business in a structured way? 3 - Do you know the maximum potential liability of each exposure? 4 - Are decisions made on the basis of reliable and timely information?  5 - Are the risks large in relation to the turnover of your business and what impact could they have on your profits and balance sheet? 6 - Over what time periods do the risks exist? 7 - Are the exposures one-off or are they recurring? 8 - Do you know enough...

How to manage your risk(Risk and Reward)

Traders have no business trading if risk/reward analysis is not at the top of their concerns. If a trader has no idea of the potential profit return on any given trade relative to the initial risk of taking the trade at all, his long-term profitability is in question. Of course, for every trader, the best case scenario would be to minimize the first and maximize the second. But how do you get a handle on the potential reward in any investment and the risk you might be taking on? Technical analysis – what’s popularly called charting – can help traders evaluate both risk and reward. The technical indicators used to read the charts will give you...