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The Risk of Trading

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The Risk of Trading
With lessons that could be easily ported to other traits of life, the author makes an outstanding job pointing out how people often misinterpret risks because they lack the complete understanding of the peculiarities of the given trade. The unknown is a risk by itself, but when it is overestimated you risk not making a profit whereas when you underestimate you risk losing money.

The author doesn’t fantasize about a silver bullet for trading, or a set of techniques that will guarantee your success. He even admits the several bad days all traders have to go through and how bad they can be. And this is one of the reasons why I liked the authors approach to risk management by not underestimating the task and making it clear that there are no silver bullets but rather best practices that will improve your chances of making good trades.

He constantly reminds us of the importance of keeping our trading data log safe and accurate, and how that can help you improve your trades in the future through comparison on previous numbers and experiences, and I found very interesting how that relates to several other areas and aspects of life that we usually miss out on keeping logs and are doomed to constantly keep the same mistakes time and again.

Traders would definitely have found this book much more interesting and useful than I did, but it definitely is a good read for those who are interested in building another perspective on risk management and the trading business.

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