Don’t think you are, know you are…

Introduction
24 Sept 2008, 14:37 GMT

Hmmm…it is becoming apparent that writing a blog about trading is not as simple as it seems. I find it very difficult to choose the right introductory topic for general audience, let alone any professionals who might be reading this and eager to spot any flaws or inconsistencies in my blog.

I wanted to believe that discussing about risk is the most suitable subject. It will allow you to really assess your ability and risk profile towards trading. Whether you are fitted as a risk-taker or a risk adverse profile, you still need to understand yourself before jeopardising thousands or millions of dollars.

Risk taker or Risk adverse
It is all about your personality though. I disbelieve to the idea of risk taker is an egomaniac and risk adverse otherwise. To tell the truth, we act differently on every instance. It is the same thing in trading. A risk taker is prepared to pay aggressively to satisfy his or her novelties and in order to obtain maximum rewards.

Likewise, a risk adverse person is sharing identical traits including seeking maximum rewards. But a risk adverse person is more cautious than a risk taker. The latter may employ less research and analysis to decide on his or her trading and perhaps focusing only on some big investment returns. On the other hand, a risk adverse person most likely to research and analyse thoroughly before committing any trades.

I used to think that I am a risk-taker. But gradually I am becoming more cautious especially when I have other ‘commitments’ that I am not prepared to risk for. Obviously, being a private trader, your capital, leverage and margin are fairly small. Ergo, I don’t think it is a sin to be a risk adverse. So you decide. Like Morpheus said in The Matrix, “don’t think you are, know you are”.

I trust that once you passed this episode of knowing yourself, you would be more discipline and objective in executing your trading strategies.