The difference between risk and chance in financial markets🔰
Responsiveness skill:
Whether we like it or not, in all financial markets, a large part of market fluctuations is unpredictable for traders. Many modernist and financial intellectuals claim that nothing is predictable in the markets and that the market is a random process (I completely disagree with this theory). This unpredictable part causes ambiguity and doubt in people's transactions. Some call this uncertainty a chance and some a risk. I intend to speak in favor of risk and against chance.
Let's go with the old example of surfing. A professional surfer will never predict sea waves if he is wise. The surfer knows that he should not enter the water on stormy days, and on calmer days there is space for surfing. Except for a crazy surfer, no one will say that I am sure of every single wave, so I hit the water with my eyes closed! Uncertainty is an accepted part of surfing.
But what is the solution?
The solution is the skill of being responsive, or in other words, quick and appropriate reactions. Knowing that his predictions are flawed, the surfer enters the water and after years of practice has acquired the skill to react appropriately in the face of any situation and any wave. And in this way, with the decisions in the moment, he does his job in the best way.
So the surfer first chooses the right day for exercise by examining it, but on the desired day he is ready for any unforeseen event, and with the skill he has, he can react appropriately to any event.
The same is true in the financial market. There is no chance. Whatever it is, it is an uncertainty that, incidentally, must have been planned in advance and adequately prepared. You are entering a trade that you know from the beginning has an 80% chance of success and a 20% chance of failure. If there is a 20% chance of failure and you realize that the deal was wrong, all you need to do is make the right decision. We are not talking about luck !! We are talking about a risk that you knew about before the transaction and accepted it. Before that, it was about talking about the risk that you accepted and entered the market. If you did not calculate your risk before entering into the transaction, you are the first and last culprit of any failure.
I remember in the early years of the experience in the markets there were many times when I made mistakes with my own capital or the capital of others, and in those days I blamed everything except what was the main destination. Someone's money is bad !!!! Someone has no chance, his money got mixed up with my money, he made me unlucky !!! Your donkey country !!! Rent Exchange !!! And a thousand other excuses. But today, after years, I admit that every bad thing that happened to me in the market was the result of my own inexperience and mistakes, and it will be the same from now on.
In the words of Rumi:
"Everything in the world is not outside you
Ask for whatever you want in yourself"
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If something bad happens to you in the market, it is extremely ridiculous for you to open your feet to the story by chance, luck, divine wisdom and providence. After all, your skill is in relation to market characteristics, one of which is calculated risk. In the words of a famous trader (I do not remember his name): God has no head in the financial markets! Spend your time strengthening personal skills instead of praying.
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Hope you Enjoyed This Article,
have a Great Sunday,
CHEERS
ShoJaa