Save and multiply. Diversification of risks in the market

Diversification of risks at Master Class: Training in Internet Trading and Stock Exchanges

Deeper and deeper into the specifics of trading on the currency market, the trader begins to monitor and predict the risks more thoroughly. Recklessness and thirst for easy money give way to a well-balanced and thorough approach. It's time to think about diversification of assetsIf you as a trader are concerned about risk insurance.

What is diversification?

Diversification - is, above all, the distribution of risks in different directions so as to avoid the loss of the entire asset portfolio or deposit in the event of an unforeseen reversal of the trend.

As a rule, about diversification The more experienced and experienced traders with medium and above deposit sizes think about it. This is partially explained by the fact that people with small financial assets come to the place where there is an opportunity to start trading with a small initial capital, that's why the funds are allocated in such a way as to diversify risksIt is unlikely to work on a small account.

An example of diversification in the e can be the opening of several accounts in which funds are in different position/cash ratios and traded according to different strategies. An additional trading account will certainly be a distraction intraday, but if you don't want to keep all your eggs in one basket, you'll have to work hard.

Examples of diversification at

The most primitive example of diversification, and often used by traders, is trading currency pairs that have different behavior in the market - for example, trading major pairs by one strategy, commodities by another, and hedging or gold by a third. All this can take place on one trading account or on different accounts, the main thing is to use similar volumes.

An interesting option for diversifying the trader's own funds can be opening in addition to deposit on but bank depositor the choice of a more traditional investment scheme: real estate or mutual funds. Often currency speculators also trade in the stock market or speculate on futures and options, but here you have to be very careful: the volumes in the stock market and the stock market are incommensurably different, the level of risk is also different, although the principle of "buy low, sell high" is the same.

Another way for traders to diversify their free assets can be investing them in popular PAMM accounts or transfer them to the management of some fund, or just a trustee, which from his point of view, can increase the deposit for a suitable fee.

And of course you can invest in yourself. his education. It is an investment for the distant future, however, most often justified, because no one will be able to multiply your money better than you.

Investing funds, if we are talking about a competent and balanced approach and counting on a long-term fruitful work, is an activity like any other, so the thought of hedging risks are necessary for those who intend not only to multiply, but also to preserve the funds they already have. It is also worth noting that in order to optimally diversify funds into a different sphere, you need to understand it at least at the level of understanding of its functioning.

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