The 3 biggest mistakes people make on RISK

dozu888 said:
in other words, when you are young you need to be conservative! not in the sense of putting money in bank CDs, but in the sense of following the proven path to wealth - climb the corp ladder to a director / VP position asap! or gather enough skill and become independent consultant ASAP!
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In your youth, you need to take risk to advance your career, whether you work for GM or work for yourself. However, you should be conservative in finance, live below your means and let compounding does its magic.

In a big corporation, you don't become a VP by being conservative and play it safe. You need to take risk to be noticed. There are typically 3-4 levels from a worker to a VP. The probability of becoming a VP is 1 in 1,000 to 1 in 10,000, not a high probability, proven path to high pay and wealth if you don't take risk. IMHO, the right philosophy is to take risk: Up or out, because you don't have a lifetime to wait if you want to be in charge.
 
Traders who don’t manage their risks, risk losing everything. Traders can’t allow themselves to think only about profits. You should always count how much money you risk losing per trade and day. If you keep your potential losses limited, you will be able to stay in the market for a longer period and will have many opportunities to earn. Stick to the rule of 1% risk per trade. Stick to the rule and follow the plan.
 
One major mistake that I have observed people making, is that they keep over trading out of greed, which is not going to help them in any manner. They are bringing in more risk for themselves for sure.
 
Louis_tr said:
One major mistake that I have observed people making, is that they keep over trading out of greed, which is not going to help them in any manner. They are bringing in more risk for themselves for sure.
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I agree. Over trading is a bad idea.
In fact many people invest so much money in trading that they expose themselves to so much of risk and ending up blowing their accounts altogether.
 
rider20 said:
I agree. Over trading is a bad idea.
In fact many people invest so much money in trading that they expose themselves to so much of risk and ending up blowing their accounts altogether.
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Well people need to draw a line, which they aren't.
 
The worst one is risking too much capital on 1 trade. That is enough to blow out your account and it does not matter if your capital is $25,000 or $500,000. If you do not take care of your capital, you will blow it up trading. They recommend risking only 2% per trade. Others suggest risking only 1% if you are a new trader. That probably, will atleast, give you a chance till you figure it out.
 
Exactly. If you can’t manage risk, you will be wiped out with a blink of an eye. Risk management is that important. So determine risk tolerance levels for each trade for a better game.
 
dozu888 said:
The logical thing to do is
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bulls95 said:
Exactly. If you can’t manage risk, you will be wiped out with a blink of an eye. Risk management is that important. So determine risk tolerance levels for each trade for a better game.
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I agree with you. What do you do to make sure that risk is completely managed on your part?
 
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