The Importance of Risk Taking

Discussion in 'Psychology' started by slacker, Nov 17, 2009.

  1. slacker


    Great article on the importance of training and willingness to take risks to succeed.
    Full article at:
  2. raker


    good article..
  3. For trading, a monitoring device replaces concerning yourself with risk.

    An EMwave PC meter can be connected physically and any trader can trade in the same state as a person meditating.

    This way it is easy to find out when you do not know what you are doing.

    As a skiing coach in Switzerland, I suggested to racers that thinking was not part of ski racing. The courses all are prerun so the path is dictated. It is difficult to see when at speed, so looking down the course is secondary.

    A lot of down hill is in the air anyway. Most races are under the length of a two minute bar as well.

    In trading, missing gates and falling, are externals anyway.

    I can imagine a new trader putting on a trade and just doing two things. looking at the color of the bar and putting a line to the right of the forming bar. The slope of the line would be made to correspond to the color of the bar.

    Holding the trade would continue as long as the price moved away (to the left further) from the drawn line. When the price stopped moving away, then a reversal is called for and a new line is drawn to the right of the price forming bar.

    In ski racing, the gates are just there; they are memorized and your technician has you equipped for the day. In between gates, the racer strives to hold on the fall line as much as possible. Your bod doesn't tell anything about this since the G's are so strong. Getting in the air does help however.

    All that has to get through a gate is your forward shoulder. That's why reverse shoulder is de rigour.

    By watching when your hold stops moving away from an arbitrary line, you know when to weight your inside ski to set the exit line on the fall line.

    its like watching the quarter wave come up from under the keel when you are turning a mark, you always keep it maxed to suck you around the turn by losing less momentum to angular velocity forces the turn could create.

    Tp slalom trades long and short by reversing, you always pick off the bar volatility as well. How to you "feel" that extreme part of the turn? By how you approach the turn, is how.

    What part of a five minute bar does price momentum give you the extreme values.. If you are position cross trading stocks, when do you do the crossover from one money velocity to another. Obviously, on a list, the list tells you just by the way the stocks position themselves on the list. But for just one intstrument being traded with a neutral bias, how does the potential trader begin to carve the turns if he can't see the gates and doesn't know the fall line?

    He puts them in place so he can see them when they matter. Digging volatility expansion is one of the neatest holds of all. A trader always knows where a retrace begins as compared to where a reversal begins. If an MLR were the fall line, then a reversal starts on the fall line. Retraces start on the boundary of the racing map, the edge. This is the difference between a point 2 and an FTT. One begins a retrace and the other begins a reversal. Which is further away from the line first drawn above? Onviously, retrace beginnings are.

    What does a person do when a reversal begins and the old line drawn is hit? He holds because after this point volume becomes dominant. BO of an old RTL is where price is on the fall line of a race downhill (where the tail of the new MLR will be found in aq while).

    When I tested skiis for Head, my fav was the X57's (triple grooved like jumpers). Too bad they were too expensive to go into production. There was no way to keep the racing veneer glued to the body just behind the front tip curve ending. My worst falls netted 45 degree permanent bends in front of binding areas.

    So to carve the turns of reversal trading, annotating is required. Drilling down to faster and faster fractals, gives more frequent turns on limiting extremes. To slalom the indexes, a trader sets the gates on the best fractal. Tomorrow's turns are already set (See other post with attached turns).
  4. Belichek took a risk... got it SHOVED UP HIS ASS... That's why it's "risk"..
  5. I agree it is a good article.
  6. There is difference between calculated risk and fool-hardy.Risk like other things have affordability issue. You need contingency. You need to know your maximum draw-down (risk) and do not go over it.
  7. I would guess that the majority of aspiring traders have no problem with risk. To even think about seriously trading full time and putting your money in short term predictions you have to have a higher risk tolerance than the average person. Through countless repeated failures a trader then learns how to control and decrease risk by telling the gambling leverage devil on their shoulder to shut the hell up or they stay stubborn and convinced that they will take 30k to glorious riches. I call that trader stubborn because they can't accept the fact that if they used conservative risk management with their amazingly under capitalized account they would probably be making less than minimum wage.
  8. No trader ever went broke by not taking enough risk.
  9. Redneck



    Risk is just part of this business no doubt – losses, position sizing, the volatility of the vehicle we chose to trade, sufficient capitalization, time of day we trade, how we’re feeling, etc, etc…

    I believe what truly separates successful traders is their ability to ardently and consistently manage all the associated risks – 100% of the time

    After all it is the only control (tool) we have – but applied correctly and consistently – it is a quite powerful and a very effective tool - IMO of course…

    Good thread OP