Overexposure definition

The term for when a trader makes the technical mistake of investing too much in a particular opportunity.

Increasing exposure offers the chance for greater profit from a position, but comes at greater risk. When a trader believes that a trade’s profit potential is so high that they increase exposure to unwise levels, it is known as overexposure.

Almost all trades involve risk, and an overexposed position can end up incurring significant losses even when you’ve undertaken measures to limit your risk. Being overexposed on a leveraged trade, for instance, can mean ending up with losses that exceed your initial deposit.

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