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General TradingF
Financial Risk
Financial risk is the possibility of losing money on an investment or business venture. It encompasses market risk, credit risk, liquidity risk, and operational risk, and is a central concern in portfolio management and trading strategy.
Example
“The trader assessed financial risk before entering the position by calculating that a 5% adverse move would result in a $2,500 loss, which was within their acceptable risk tolerance of 2% of account equity.”