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#Post#: 323--------------------------------------------------
What is the Real Risk of Trading
DIR By: fxvictory
Date: March 3, 2015, 4:17 am
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What is the Real Risk of Trading ;D ;D
I realized that a lot of our conversation around Risk and Loss
is not conducive for an optimal mindset for trading. As a matter
of fact, the concept of risk and loss as we see in other life
situations doesn't apply for trading. Understanding this will
help us see the real opportunity in "Risk and Loss" while
trading.
Trading is based on probability. Any given trade has a
probability to Win BIG or Loose Small. Loosing small is a
mandatory requirement for Winning Big and letting the
probability to work in the long run.
As you can see any system with a positive expectancy will
produce a profit in the long run Provided we take small looses
on the way. It is how probability works.
In conclusion, If you are using a system with positive
expectancy and have the discipline to follow it, there is no
Risk in trading, there is only Opportunity to either Win Big or
Loose small in any trade for the greater good of turning a
profit in the long run.
HTML http://www.vantharp.com/tharp-concepts/expectancy.asp
HTML http://www.vantharp.com/tharp-concepts/expectancy.asp
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