free in thread mentorship
- Thread starter AttoCEL
- Start date
to each their own, there are levels to every game
You asked for a definition. I gave you mine.
How about you define what makes a system low risk.
Low Risk System = A method, to know exactly at any moment - with controlled risk and execution; the why, when and what you are doing in profitably extracting the market's full offer.
define what you mean by controlled risk
As it applies to trading, I see risk as a variable that is either knowable or unknowable, iow - defined.
I can know an unknowable thing by classifying it as unknowable. Of those unknowable things, some can be knowable.
Risk is further distinguished by one's model of the market's system of operation. One's choice of model can either increase one's understanding or not, it depends on how accurately the map resembles the territory. One's model of risk encapsulates one's understanding of it. Noise in one methodology and visualization of market data might be signal in another.
A methodology is based upon a model and a process that is repeatable. The process will generate outputs based on consistent application of inputs. These output signals would provide analysis to guide trader actions of entry, exit, hold, reverse, sideline.
If something can be defined than there is the possibility of understanding it's meaning by virtue of it's associations of attributes and behaviors. This could be interpreted as it's "truth." This truth it is based upon the context and circumstances that determine when the definition is true or false, what influences it, and how repeatable this truth can be observed.
If a model is defined, then risk is controllable
If a model is undefined, then risk is uncontrollable
Therefore; controlled risk = a model of the market that is defined.
let me simplify the question... how exactly are you increasing and decreasing risk. are you dropping the position size or are you limiting number of attempts. thats more what im getting at. some people dont want to risk capital and others dont want to risk time. where do you sit on that scale?
Are we talking about systems or individual trades now?
Your question is context dependent.
If I'm learning a new market/instrument/process/strategy/tactic I want to invest more time than capital. Once I have integrated new information into long term memory, tested and verified it, then max risk capital deployed at predetermined timeframe/events/levels as per my current methodology.