ALGO GENESIS
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Algo Genesis: Risk Level Explained
Here, we will be covering on the risk levels, how they are structured and which risk may be best for you.
Generally, our system segregates risk into three main levels, just like any other institutions: Low, Medium, High.
① Understanding how risk levels are created and structured.
Contrary to conventional methods, our risk level is based on – the number of assets traded, instead of the lot size.
This means; the greater your risk appetite, the more pairs you will be trading.
Taking an example:
For the same portfolio size of 1,500 USD.
- A low risk account will be trading – 1 pair.
- A medium risk account will be trading – 2 pairs.
- A high risk account will be trading – 3 pairs.
② The Idea behind this structure.
Common practice by both providers and traders alike are to trade by increasing the lot size significantly per trade (i.e 0.1 – 2 lots).
This will generate high returns per pip movements, and is definitely lucrative. However, this also pose a great risk should the trade take a short down turn.
Hence, to mitigate this risk while maintaining an equivalent return of a higher lot size trades, our solution is to diversify into multiple assets.
Keeping the lot size low, and trading multiple assets will allow us to generate income from multiple sources while keeping risk at bay – as they always say:
“Do not keep all your eggs in one basket”
③ Which risk is suitable for you?
The most frequently asked question. Which risk is best suited for me and what should I take note on?
Low Risk :
- Conservative investor. Not a risk taker.
- If you are required to constantly withdraw more than your profit consistently every month, it is recommended to be on low risk. This will allow more liquidity and less open trades.
Medium Risk:
- Commonly for those who do not know if they want low or high risk. Good for those who are indecisive.
- No particular investment plan type.
- High-risk taker.
- If you are the type that leaves your account untouched for a long period of time, high risk is suitable for you.
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