If I cannot sleep at night on a specific position etc.. I will not enter it. I will only enter a trade etc.. once I feel comfortable with all possible outcomes good or bad. ie: think about worst case scenario before entering etc.. ie: hudson river landing situation etc..
you can't know all possible outcomes. all you can control is your understanding of trading and where you get in/out (most of the time). if you spend too much time over analyzing, you'll end up developing analysis paralysis and that is hard to get over.
Two outcomes. 0 loss. 1 profit. If I am not comfortable with a 0 and 1 outcome on a trade I will not enter it. Life is too short. I work towards option #1 but I take into consideration option #0 and I will only enter the trade if I am comforable with the possibility of option #0 Obviously I strive towards profit but I will not enter into a trade if I cannot take the losses.
every single trade any of us take could happen right before a major nuclear attack. Unlikely, yes, but still possible. The degree to which you profit or lose also varies greatly. It all comes down to what YOU can control. Where you got in, where you get out, how much wiggle room you give the trade, how good you are at managing risk and controlling your emotions etc etc. My point was worrying about worst case scenarios that are out of your control is pointless. Even the best trades are subject to potential black swan events. You'll drive yourself mad trying to know every angle. PS If your premise is to only take trades based on your pre-defined set of rules then I agree 100%.