The #1 reason traders find it hard to follow their risk management plan.
Risk management in trading, in my opinion, is a skill and a discipline.
Risk management happens to be a major constituent of longevity in the trading game but unfortunately, most traders find it hard to incorporate this into their trading system. The absence of this has lead to a lot of blown accounts and psychological ordeal in so many traders' journey making a lot of traders fail and eventually quit trading.
Thinking about it, if risk management is so important to trading, then why can't the majority of traders follow it?; based on my experience as a trader, I can tell that #1 reason why is as a result of Greed.
Amongst other reasons traders find it hard following their risk management plan, greed is paramount.
Greed in trading is psychological and it rises due to an excessive desire to make unrealistic returns from the market as a result of the profitable nature of the market, making traders go crazy on their risk management plan. Greed has led to poor risk management and a lot of blown accounts.
Alongside striking out traders' risk management plan, Greed also brings about a lot of trading mistakes and a number of them are overleveraging, forcing trades, impatience, lack of profit objective, inability to accept losses, etc. If you notice, greed brings about the major trading errors made by traders.
Greed messes up one's trading psychology and leads to more losses. It is said that 90% of traders can't keep 90% of their account for 90 days; greed is one factor that leads to this. Greed throws your emotional discipline out the window, messes up your risk management plan, and ruins your account!.
What other factor do you think ruins risk management? , share your experience!
Risk management happens to be a major constituent of longevity in the trading game but unfortunately, most traders find it hard to incorporate this into their trading system. The absence of this has lead to a lot of blown accounts and psychological ordeal in so many traders' journey making a lot of traders fail and eventually quit trading.
Thinking about it, if risk management is so important to trading, then why can't the majority of traders follow it?; based on my experience as a trader, I can tell that #1 reason why is as a result of Greed.
Amongst other reasons traders find it hard following their risk management plan, greed is paramount.
Greed in trading is psychological and it rises due to an excessive desire to make unrealistic returns from the market as a result of the profitable nature of the market, making traders go crazy on their risk management plan. Greed has led to poor risk management and a lot of blown accounts.
Alongside striking out traders' risk management plan, Greed also brings about a lot of trading mistakes and a number of them are overleveraging, forcing trades, impatience, lack of profit objective, inability to accept losses, etc. If you notice, greed brings about the major trading errors made by traders.
Greed messes up one's trading psychology and leads to more losses. It is said that 90% of traders can't keep 90% of their account for 90 days; greed is one factor that leads to this. Greed throws your emotional discipline out the window, messes up your risk management plan, and ruins your account!.
What other factor do you think ruins risk management? , share your experience!