Re: The #1 reason traders find it hard to follow their risk management plan.
Risk management in trading, I believe, is a skill and a discipline that every trader must-have.
The absence of risk management in a lot of trading systems today has led to lots of blown accounts. Now, what makes traders find it hard to follow risk management since it is very important?
The #1 factor causing this is Greed.
In my opinion, Greed is just one psychological factor that causes havoc in a trader's journey as it opens room for other trading errors.
With Greed, you find yourself overleveraging, putting on trades that are not ready, in fact you will be too greedy to set a take profit because you ant more and more from the market.
Greed is one factor that messes up one emotional discipline and gives room for irrational decisions.
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” – Victor Sperandeo.
What other factor do you think ruins risk management? , share your thoughts and experience!
In other words, FOMO is an example of greed. FOMO is Fear-of-missing-out. You are always scare that if you don't follow the trend, you'll miss a chance to earn profit. However, you have to be really wise in that situation. Judge any trend carefully with your knowledge and skills, don't just follow others. Many trends are created by the whales to direct the market for their own behalf. The absence of risk management in a lot of trading systems today has led to lots of blown accounts. Now, what makes traders find it hard to follow risk management since it is very important?
The #1 factor causing this is Greed.
In my opinion, Greed is just one psychological factor that causes havoc in a trader's journey as it opens room for other trading errors.
With Greed, you find yourself overleveraging, putting on trades that are not ready, in fact you will be too greedy to set a take profit because you ant more and more from the market.
Greed is one factor that messes up one emotional discipline and gives room for irrational decisions.
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” – Victor Sperandeo.
What other factor do you think ruins risk management? , share your thoughts and experience!