Risk Management with AI Stock Signals
AI can help you find ideas, but it cannot remove risk. This page outlines simple, practical risk management principles to consider when using FutureGain's signals for positional investing.
1. Position Sizing
Avoid putting a large percentage of your capital into any single idea, regardless of AI score. Many long-term investors cap each position at 5–10% of their portfolio and adjust sizing based on conviction and liquidity.
2. Diversification
Even if several high-scoring ideas belong to the same sector, consider diversifying across sectors and themes. This reduces the impact of sector-specific shocks.
3. Stop Loss & Time Horizon
FutureGain shows suggested stop-loss and target zones, but these are not guarantees. Always decide in advance how much downside you are willing to tolerate and how long you are willing to hold a position if it moves sideways.
4. Expectations
No AI model can be right all the time. Treat signals as structured research starting points, not certainty. Be prepared for losing trades and use sizing and diversification to keep drawdowns manageable.