Pursuing Profit Versus Managing Risk

What’s matters more as a trader: The need and desire to profit or the necessity of consistently managing the risk on each and every trade?

Most struggle mightily between the two and when all is said and done, will land on the side of doing everything they can to profit from the market.

Unfortunately this is the worst side of the question that one can fall on.

You see, when you focus solely on profiting in the market and making it your primary focus in trading, what you also end up doing is make capital preservation far less unimportant.

There is no 80% profit and 20% risk management approach or even a 50% profit and 50% risk management that is acceptable to one’s trading. 

Because any successful trader will ultimately tell you that trading comes down to 100% Risk Management!

That is no doubt a hard pill to swallow because traders are not lured into trading stocks because of some intense passion for managing risk. Instead it is the desire for riches, wealth and everything in between.

Even with periods of calamity and blowing up their accounts, most traders will never realize that it isn’t so much about one’s desire to pick the right stocks as much as it is to manage the picks. And there’s no shortage of charlatans out there standing in front of Lamborghinis, yachts, and beautiful women while living on their own private island to sell you on the falsehood that its all about making millions while conveniently forgetting about the risk.

What they should be teaching you, and it is the sole focus of my trading, is that if you manage the risk appropriately, the profits will always take care of themselves…ALWAYS!

I don’t take big losses. If I lose on a trade, I take a loss on average of 1.7% against the position. That means the capital lost on the overall portfolio is only 0.17%, because I only trade a max of 10 positions with 10% position sizes. I know that I don’t have to win every time, and I also know that when I do win, my profits are going to average out to at least twice that of what I risked on the trade.

What I am trying to say, is that profiting in the stock market will never happen for you until you learn to not make that the focus of your trading. Your only responsibility as a trader is to manage the RISK. –

Nothing else.

Absolutely Nothing Else!

That means your focus of risk management is for new trades, old trades, losing trades, and yes PROFITABLE trades.

Everything boils down to Risk Management.

If you are struggling with your trading or looking to bring consistency to it, then consider trading with me in the SharePlanner Trading Block by signing up for a Free 7-Day Trial. With your subscription you will get full access to all my trades in my trader’s chat room, as well as receive alerts via email and text (international too). In the process, you will start managing the risk and start  profiting from the market as a result, by keeping losses small, and the winners big.

With The Splash Zone, you will get my low risk and high probability trade setups that no other trading service can offer.

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