The Most Underestimated Risk In Trading

[KINGOFSHORTS]

Undercapitalization, excessive leverage and poor risk management.

This kills traders all the time, you could be correct but you blow up on the way to victory on one temporary drawdown.


IF your sailboat cannot handle choppy waters on the way to your destination you have no business getting off the dock to begin with.

 

[JoePaterno]

Quote from afto:

I have given up trying to predict which way the market goes. Nowadays, I enter with a protective stop and a target. Once the trade is triggered, I'm done for the day. Off to the gym, hike in the mountains, swim in the pool or just doze off for a while.My attitude is that its all in the lap of the Gods. I have no control. Set and forget. Win or lose.

I have given up trying to figure out the areas of support and resistance, worrying about the impact of news and a whole host of other variables that are both beyond my understanding and control. Sfunny but the less time I spend in front of the monitor the more profitable I am.

This is not to say that you can't time the market or pick turns. I'm sure there are plenty folk who claim so - and many that actually do so. Hats off to them.
The market still interests me and I love playing around with new ideas, new configurations and hearing new ideas but now its a choice not a compulsion
JMO

This ranks as one of the most naive posts ever on ET. You don't try to predict it (which is what "timing the market or picking turns" is), you are unwilling to monitor it, but you are willing to make trades in the market and walk away while your "stop loss" may or may not get you out in a fast or chaotic market

 

[CTan]

Relying on a single edge to be profitable and not accounting for market changes over a period of time.

Other silent and underestimated risk can be having a tunnel vision of markets.

Best,
Chris

 

[HowardCohodas]

Quote from CTan:

Relying on a single edge to be profitable and not accounting for market changes over a period of time.

Other silent and underestimated risk can be having a tunnel vision of markets.

Best,
Chris

Thanks for reminding me of something I sometimes forget.

Risk: Knowing when your strategy no longer works.

 

[deadbroke]

Quote from tradingjournals:

What do you think is the most underestimate risk in trading? I have my answer to this question, but allow the discussion to develop I will delay it. I would even say that traders may be taking risks they are not even aware they are taking.

Now your turn to get your valuable input. Do not worry about being right, or wrong. There are risks which are personal.

Moderators : Could you edit the thread title. Change Underestimate to Underestimated (missing d).

"What do you think is the most underestimated risk in trading?"


The HERD's destiny is to lose.

 

[lakai]

Timing.

 

[afto]

Yes, I'm willing to risk a flash crash every once in a blue moon but I sure as hell aint willing to lose my health, well-being and sanity for a few extra E-Mini points. Naive maybe, but its my story and I'm sticking to it.

Quote from JoePaterno:

This ranks as one of the most naive posts ever on ET. You don't try to predict it (which is what "timing the market or picking turns" is), you are unwilling to monitor it, but you are willing to make trades in the market and walk away while your "stop loss" may or may not get you out in a fast or chaotic market

 

[NoDoji]

Ego

 

[trefoil]

Quote from NoDoji:

Ego

Yup.

 

[gtor514]

For me trading is a full time business.

If you are trading full time in lieu of a career; you may be risking losing a career or the professional development that comes from one. Sitting in front of a computer 12hrs a day staring at charts for a couple of years is not exactly something you want to put on your resume.

All the more reason to succeed at this business if you decide to undertake it.