Risk management in stock market research paper

Before learning risk management you need to understand what is the risk? In every corner from a small corner store to a large manufacturer there are common challenges and risks. Fire can damage buildings, someone can slip and fall, a vehical accident, etc. A good sense of risk in its different forms helps investors to better figure out opportunities, trades off, costs associates with different approaches. In the financial world risk management are the identification analysis and acceptance of uncertainty in investment decisions. Risk management occurs when investors and fund managers attempt to quantify the potential losses in an investment. Then takes the appropriate action given the fund's investment targets and risk tolerance.

Risk management Process

There are 5 necessary steps to managing risk these are 

1. Identify the risk
2. analyze the risk
3. Prioritize the risk
4. Treat  the risk
5. monitor the risk

1. Identify the risk

The first step of risk management is to identify the risk that the business is discovered to in its operating environment. There are many types of risks.

1. legal risks
2. environment risks
3. market risks
4. regulatory risk

It is important to identify as many of these risk factors as possible.

2. Analyze the risk

Once your team identifies the potential problem it's time to go a little deeper.

1.  How likely these are going to take place?
2. If they take place what will be the consequences be?
3. In this process, your team will examine the probability and fallout of each risk to choose where to focus first?

3. Prioritize the risk

After analyzing the risk prioritization began. Rank each risk by possibility of happening and its potential impact on the project. It will help you to identify the useful solution for each risk.

This way the project itself is not interrupted in ways during the treatment stage.

4. Treat  the risk

After prioritization of risk develop your treatment plan. while you cant accept every risk you should have set up the previous step for the success of your risk management process.

Starting with the highest priority risk first task your team either solving or at least reducing the risk.

5. Monitor the risk

Transparent communication between your team and stakeholders is crucial for the ongoing monitoring of potential threats. Risk needs to be continuously monitored to make sure that risk plans are working to keep you aware of if a risk becomes a greater threat.

Research paper on risk management.

1. Trading Risk Management: Practical Applications to Emerging Markets

1. Risk Management in Stock Market- Challenges and Suggestions

1. Risk Management and Stock Market

1. Risk Management-An Analytical Study

1. Risk analysis, reporting and control of equity trading exposure: Viable applications to the Mexican financial markets

1. Systemic risk management and investment analysis with financial network analytics: research opportunities and challenges

1. A New Scheme for Proactive Risk Management in Stock Market

1. Impact of COVID-19 on Market Risk: Appraisal with Value-at-risk Models

1. Risk Analysis and Prediction of the Stock Market using Machine Learning and NLP

1. NSE WORKING PAPER India Volatility Index ( India VIX ) and Risk Management in the Indian Stock Market

Important questions for retail investors

1. Do you plan your trade before the market opens?
2. How important for you to calculate your risk?
3. What is overtrading?
4. What was the motivation you become the trader?
5. Do you have the explanation for your trade decision why you buy or sell?
6. Do you have any trading strategies?
7. What is the success rate of your trading strategies?
8. How you avoid the emotional trap?
9. Do you identify the driving force for the market?
10. Do you try to hide your losing positions and show your winning position?
11. How you react when your trade goes against you?
12. Do you try average losses?
13. Do you decrease your trading volume when you are loosing?
14. Do you increase your trading volume when you are winning?
15. When did you decide to cover your positions?
16. Do you have a trading system for trading?
17. What percentage of your trade is based up the trading system?
18. Do you have any trading rules?
19. Smart money vs Dumb money in the Stock market
20. The truth of the brokerage industry, Trading expert & retail traders