<h2>Pure Risk</h2>
<p>In the realm of trading, <strong>pure risk</strong> is a term that often crops up. It's a type of risk that doesn't bring any potential reward, only the possibility of loss. Let's delve into this concept and understand its significance in trading.</p>

<h2>How It Works</h2>
<p>Pure risk is inherent in any activity where the outcome is uncertain. In trading, it's the risk of losing your invested capital. This type of risk doesn't have a flip side of potential profit. It's the downside that traders face, regardless of the market conditions or their strategies.</p>
<p>Pure risk can manifest in various ways. For instance, market risk - the risk of price movements against your position, or counterparty risk - the risk of the party you're trading with not fulfilling their obligations.</p>

<h2>Why It Matters for Traders</h2>
<p>Understanding pure risk is crucial for traders. It helps in:</p>
<ul>
  <li>Setting realistic expectations: Traders should understand that losses are a part of the game. Pure risk helps in managing these expectations.</li>
  <li>Risk management: Knowing the extent of pure risk can help traders set stop-loss orders, diversify their portfolios, and use risk-reward ratios effectively.</li>
  <li>Making informed decisions: By understanding pure risk, traders can make more calculated decisions about when and what to trade.</li>
</ul>

<h2>Example</h2>
<p>Let's consider a simple example using STB Provider's MetaTrader 5 platform. A trader opens a position with a leverage of 1:300, investing $100 in EUR/USD. The stop-loss is set at 50 pips. If the market moves against the trader by more than 50 pips, the trade will be closed at a loss of $62.50 (50 pips * $1.25 per pip). This is a pure risk scenario, as there's no potential profit in this loss.</p>

<h2>Key Takeaways</h2>
<ul>
  <li><strong>Pure risk</strong> is the risk of losing invested capital, with no potential reward.</li>
  <li>Understanding pure risk helps in setting realistic expectations, managing risk, and making informed trading decisions.</li>
  <li>Pure risk is inherent in all trading activities and can't be entirely eliminated, only managed.</li>
</ul>