May

5

 Risk facilitates exchange and all prospects of any gains arise from change. If there was no room for any uncertainty or risk, then no exchange would ever occur. In a risk-free world if a decline is guaranteed no one will buy and if a rise is guaranteed to happen no one will sell. Thus no one will be able to gain even if it was guaranteed that a fall or a rise is going to come, due to absence of any exchange.

Therefore, those who are ready to lose only have a prospect of winning.

How much is one entitled to lose is something each must assess, on a single trade, in a single period of time, in a single window of measurement etc.

Yet most end up focusing on forecasting. Now forecasting to my mind is nothing but studied imagination of the future refined with the help of analysing the past. It is this nature of forecasting, that there is imagination involved not foreknowledge prepares one to accept existence of risk and the need to manage it.

Whether one uses tea-leaves or frequency-leaf-diagrams, it therefore is critical to practice your chosen form of art or science with humility.

If anyone believes humility is the most powerful currency to prevent the market-mistress from collecting a toll larger than you should pay, then there is respect for risk. If there is any other who refuses to respect risk, the mistress then clearly finds a gaping hole in such personae to serve humiliation.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search