The Most Underestimated Risk In Trading

Discussion in 'Trading' started by tradingjournals, Oct 9, 2010.

  1. 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).
     
  2. jnbadger

    jnbadger

    There it is. Many have done all kinds of backtesting to give themselves confidence, but can't follow through.

    I would say psychological BS getting in the way is what most traders don't think will apply to them.

    It gets in the way. Dealing with it sucks. But you get through it.

    Damn good question.
     
  3. Idiots that go heavy into a stock based on "technical analysis" and nothing else and get caught in a takeover or some seriously negative overnight news.
     
  4. joe4422

    joe4422

    I think the most underestimated risk that people take is investing their money to begin with.


    Very few come in paranoid and scared as hell with their initial money, but they do leave that way.
     
  5. Operational Risk :cool:
     
  6. Letting your emotion overrule your strategy.
     
  7. Redneck

    Redneck

    The toll this business takes on your psyche…

    And that is whether you ultimately learn how to trade – or end up failing

    RN
     
  8. liquidity
     
  9. The most underestimated risk imo is overestimating one's own skill over the long run. Past performance never guarantees future results -- this means you.
     
  10. afto

    afto

    Losing your life in front of a flickering monitor.

    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



    <What do you think is the most underestimate risk in trading?>
     
    #10     Oct 9, 2010