Risk management is not an optional extra in trading — it is what determines whether you are still in the market over the long run. This page sets out the types of risk to be aware of and the practical principles for dealing with them.
Types of risk
- Market risk: price volatility driven by economic or political events or company-specific news.
- Liquidity risk: difficulty selling at the price or time you want, in thinly traded instruments.
- Leverage risk: in margin-traded instruments, losses are magnified in the same proportion as gains.
- Currency risk: exchange rate movement affecting the value of investments made in other currencies.
- Operational and technical risk: a connection failure or platform fault may prevent an order being executed in time.
Established principles of risk management
- Size the position first, so the amount at risk on any single trade is a small share of total capital.
- Use a stop loss and set the exit before you enter, not after the price moves.
- Diversify — do not concentrate the portfolio in one holding, one sector or one market.
- Introduce leverage gradually, starting at the lowest level available.
- Do not double down on a losing position; adding capital to a losing trade increases the risk without correcting the original decision.
- Keep part of the balance in cash to avoid being forced to sell at the wrong moment.
- Record and review your trades periodically rather than watching the price minute by minute.
Before trading on margin
Make sure you understand how margin is calculated, when a margin call is issued, when positions may be closed automatically, and the overnight financing on open positions. These are set out in the terms and conditions, and our team is glad to explain them before you open a position.
Your responsibility and ours
Global Securities Company operates under a licence from the Palestine Capital Market Authority and as a member of the Palestine Exchange, and is committed to executing client orders under approved procedures as set out in the Order Execution Policy. The investment decision and the level of risk accepted remain the client's alone.
Trading in securities and currency pairs carries risk that may lead to the total or partial loss of your capital, and is not suitable for every investor. Past performance does not guarantee future results. Nothing on this page is an investment recommendation. Please read the Risk Statement.