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Top 4 Risk Management Tools Your Brokerage Needs Now

Technical advancements and the integration of customised trading solutions within mobile applications have helped retail trading soar since 2020.

As a result, the online trading market is projected to hit $18.4 billion, growing at acompound annual growth rate  of 7.8% between 2022 and 2031. A surge in cloud-based trading solutions and AI-powered robo- advisory are key drivers of growth in the retail trading market. Online trading platforms are poised to penetrate further, given their ease of integration and cost-effective solutions for brokerages. 

The market is expected to continue attracting new entrants from the digital-native generations, which are also focused on financial independence. However, with the growing number of market participants, retail traders need comprehensive risk management solutions to ensure they are not forced to exit the market after suffering severe losses. Retail traders today are focused on their long-term success and keen to build a goal-oriented trading plan. Brokerages must support them with robust risk management tools to boost trader activity and ensure continued engagement. Traders are demanding tools that are customisable to their strategy and dynamic needs during unfavourable market movements. Here are the top 4 risk management tools your brokerage must offer its clients.

#1 – Trader Education Material

Knowledge of the importance, efficacy, and techniques of risk management is paramount to helping traders build a strong risk management regimen. Brokerages must provide educational materials, including email newsletters, app updates, and social media posts, to keep traders engaged and aware of risk management techniques and tools. They may also build reference guides to help traders identify the risks associated with their trading strategy and how to develop risk management plans.

#2 – Risk Calculation Tools

Risk calculation plugins that help traders get concrete numbers rather than possible scenarios are indispensable for brokerages serving digitally savvy clients. Well-informed traders are the best decision-makers. Accurate and live risk calculators help traders evaluate the total cost and risk involved in each position, including spreads and commissions. 

#3 – Volatility Updates

Informing traders of increased volatility and available opportunities in their choice of instruments have two-pronged benefits. It lets traders know that abundant opportunities are on their way. For traders who have open positions, updates help make them aware that the market is moving and to relook at their trades to strengthen their risk management strategy if required.

#4 – Volatility Analysis

A critical tool for trading and risk management is analytical reports on volatility in real-time. These reports help identify the risk involved and the impact of taking that risk on traders’ portfolios. Real-time reports prevent the loss of precious time as they improve risk mitigation practices. Providing risk assessment graphs help traders visualise their trading strategy and act swiftly.

Choose the Best Risk Management Toolkit

Brokerages must consider the usability and intuitiveness of the interface while employing risk management software. Other advantages traders seek are analytic reports with risk matrix, good prediction capabilities, and incident navigation. 

Benefits to the Brokerage

Brokerages must provide all-round protection to their greatest asset – active traders. Well-rounded risk management support reduces trader churn and improves demo-to-live conversion rates. The goal is to help clients limit and overcome financial losses and continue trading. Differentiated service offerings further enhance customer loyalty. 

Autochartist is a market leader with a full suite of risk management tools that can be integrated with any online trading application. The risk management package is a holistic solution encompassing all kinds of risk assessment, management, and mitigation techniques. API-based plug-and-play tools can be tailored to the trading platforms’ look and feel with ease. Contact us now to add the most advanced and comprehensive risk management support for your traders.