Newsletter #1: Upon Relation with Risk and The Updated Trading Plan
Ginni Chauhan
Mapping the intersection of market structure and trading psychology.
Being in front of charts to check your analysis is something; taking actual money and losing it when wrong is something else.
Up until now we had been perfecting the model but couldn’t utilize it well due to real-time volatility and geopolitical headwinds. The last full year went towards the development of screeners, strategies, and systems. Now when testing them, the fear of losing money adds to the insult of being wrong. Same as how losses compound with wasted effort.
Knowledge and information without practical application is more mental simulation than otherwise intended. To proceed further we have to be consistent with the trading profits. If we have given it meaningful time, effort, and direction then this must give equivalent results. This is not a blackmail (or sabotage) of self nor a demand (or incentive) for effort. It is a call for the continuation of good practice, scope, and research. We must aim to make, first, the money equivalent to the costs associated with the trading experiments and then use that capital as a base to grow our endeavors further.
We need both to survive—capital to invest and time in the market as trading effort.
Two Phase Plan
The process has 2 phases. In the first phase, everything is defined, controlled, and disciplined—like a training program. The initial phase should be a slow process. Deliberately slow would work; it should work great. Small, small increments in fixing the mind, memory, systems, statements, P&L, and the facts sheet.
In the next, subsequent phase, we can let the acquired skill and expertise of self and technology take care of the variable upside.
Upon Relation with Risk
Risk is an interesting concept. Towards one side of the spectrum is the dread and danger that we must avoid or contain. The other side has the greed and overconfidence of being invincible that we must control. Since most work of meaning involves uncertainty, risk also is ever-present. Interestingly, the visible risk of today as either greed or fear always works towards guiding to the future state (or back to the source).
The successful initiation of Phase 2 represents the classic transition from RISK CONTROL to RISK AVOIDANCE. Where Phase 1 controls and manages risk with careful consideration and Phase 2 avoids it by power of capacity and the cushion of compounding.
Now to a risk-free (controlled, ignored/avoided) path to capital success and story.
GOOD LUCK!
Type your email…
Subscribe