The meaning of risk. What does risk mean to you?

What am I willing to lose to in order to potentially gain x.

 

For me, risk is the way to learn from mistakes and improve the trading skills.

 

Risks are a great way to tell that we are going somewhere wrong in our trading journey and need some changes in the strategy.

 

Risk always comes with an opportunity so it depends on how you handle that risk and make it favorable for you.

 

Risk for me is about higher returns and by returns I mean profits as well as losses. You can only expect as much profit as you are willing to risk but if the trade goes against you can also lose that amount. Risk helps me to work on my risk management strategies.

 

Ya it's strange, but thinking alot about risks, makes one think more about your stoploss.
But a stoploss method is very tricky to get right.
So, we can dwell on stoploss and if not dealt with comprehensively we fall back to perhaps shelving or ignoring it which then increases our risk.

 

Risk is simply your stop loss, beyond this game over!

 

Stop loss is not risk, it is your stop loss. The entry is the true risk.

A stop loss can be called many things. But depending on the instrument, it cannot be called risk management. I have learned this lesson in the most difficult way imaginable in these past seven years. And that idea of stop loss has completely destroyed my ability to make great gains in a bull market.

Why? Because stops are usually hit right when the market reverses and goes back the other way.

You people who keep going on and on and on and on and on about fucking stop losses in this bull market have not taken into account the insanity of the expansion in range in these indices over the past few years.

You are adhering to ideas that no longer are applicable. You are clinging to ideas that applied when the SP ranged 5 points per day for weeks on end. That no longer happens. It WILL never happen again for more than a day.

And before some gunslinger comes in here and says "Well, you were not here for 2008 and the Bear Sterns/Lehman deal", I respond with...So what? We no longer have "the Lehman and Bear Sterns situation."

This is a different world. 2008-2009 was a generation ago at this point. Get OVER it.

 

A stop loss if you get the, formula right, should work more often than not.
A crappy stoploss sitting on support of a hot stock/instrument is an area where buyers overcome dumb money.

So a well thought out stop loss system, on probabilities will negate the risk of further losses.

 

And that wholly depends on the instrument you are trading. There is no denying that a stop-loss system for instrument A may not work for instrument B.