Tag: risk

Risk: A state of uncertainty where some of the possibilities involve a loss. Uncertainty: The existence of more than one possibility. The “true” outcome is not known. Trading is about making decisions under conditions of uncertainty and risk. You can’t have risk without uncertainty but you can have uncertainty without risk. As an example, there

We all have our own horror stories of the financial crisis and no doubt have heard countless iterations of others’ woes. Fear causes us to do some dumb things, no question. When it comes to losing money, research that suggests a loss of a thousand dollars impacts us much more than a thousand dollar gain. 

Over the years I’ve been fortunate enough to get to know thousands of market participants. Some are long-term investors others are scalping pennies per trade on thousands of shares while others manage millions of other people’s money. The interesting theme I picked up on with nearly every one of them is that they each experienced panic