Risk: An Interesting Aspect of Trading and Life

Risk is an interesting aspect of trading and life. When I first started trading I was nearly paralyzed by risk, hesitant to act in fear of losing.  After becoming more comfortable with a strategy I realized risk is a necessary part of the game that can’t be avoided. When viewing risk as the cost of a potentially new opportunity, it becomes a healthy component of trading.  On the contrary, taking risk in an endless desire for more (a.k.a. greed) can be dangerous on a number of levels.

Synonymous with trading risk are non-financial risks taken in our daily lives.  As stated in Wall Street Two “Time is our most valuable commodity, not money.” Provided that our time is limited, we are required to take risks.  Whether it is risking your livelihood to pursue your passion, asking an uncomfortable question, or giving your all in hopes of developing a transformational business, each include risk. Synonymous with trading, taking risks in life can be viewed as the cost of a potentially new opportunity.

In both trading and life losses can become synonymous with risk taking. However, the way in which it is viewed becomes a distinguishing mark. In pursuing an aspiration do not the let the associated risk dampen your desire, assuming one’s actions are grounded in reason.