risk-aversion

B

bln

Being too risk-averse is a bad thing in trading. You will never acquire greatness if you are too risk-averse and fearful.

Just suffered from this psychological illness during a swing trade I did this month where I for some reason did commit to 50% position size, only made $10,000 in profits instead of $20,000. It makes you feel like shit because you feel you lost $10,000 in profits on the trade.

Could add that it was the first live trade of a brand new strategy and back test show a 62.5% win rate. Illogical to be fearful in this situation then quantitative test data shows there is no reason for it.
 
Risk is not a requirement for trading.

After you eliminate risk, usually, you keep track of the points you are earning.

This is done for you automatically under BP.

When BP doubles you notice you are trading twice the capital from when you looked ast the BP for initial capital.

A small caution. take the trouble to account for bar volatility when you type in the % of BP you are using. I reserve 6% of total BP as a saftey net for bar volatility.

Can you read prints other traders post?
 
Maybe, but what I think what matters is 'CALCULATED' risk. Risk as in the gambling is just bad no matter how you look it.

However, if you take into account the calculated risk for most trading situations, this can be beneficial in your trading. Keeping a good balance between appropriate risk and gambling is harder for others than it is for some.
 
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