Risk isn't correlated to rewards,but it depends of the niche and the situation.
If we are talking about business in general-higher profits can be achieved with better productivity and effectiveness,not by taking bigger risks.There's a certain degree of risk involved,but the company can lower the risk of bankruptcy by increasing it's efficiency and finding news niches on the market.
If we are talking about trading financial assets,cryptocurrency trading or gambling-higher risk is ALWAYS correlated to higher rewards.
Topic: RISK and REWARD are not always correlated - page 2. (Read 360 times)
I think what the author imply in this:
Nothing new here, and as a rule of thumb, you don't need to over complicate things. I think this philosophy has been one of crypto tenet's: DYOR (Do Your Own Research). Which is very true, to minimized risk and to have a chance of greater reward, then obviously, you should do everything at your control and research first and not follow the hype around a project, simply as that.
And this what separates a good investors but an average one, you just pour their money on projects they haven't check out, but just throwing their money and then bitch around when they lost when the projects died, exit scam or just be used for pump-and-dump.
What I really meant was this particular line from the article I had link above:Quote
The same is true for investing. Research every stock you buy, every investment you make. Don’t follow the hype, don’t trust talking heads, don’t rely on hunches or instinct, don’t follow one or two simple rules/factors and ignore everything else about your investments. Remember that risk and reward are on a curve, and reach for the top of that curve. That’s the way to win the investment game.
Nothing new here, and as a rule of thumb, you don't need to over complicate things. I think this philosophy has been one of crypto tenet's: DYOR (Do Your Own Research). Which is very true, to minimized risk and to have a chance of greater reward, then obviously, you should do everything at your control and research first and not follow the hype around a project, simply as that.
And this what separates a good investors but an average one, you just pour their money on projects they haven't check out, but just throwing their money and then bitch around when they lost when the projects died, exit scam or just be used for pump-and-dump.
Quote
As risk increases, reward increases, to a certain point. After that point is reached, as risk increases further, reward decreases.
Although there are times that higher risks yields a higher reward but not all the time because when that certain point is reached then the risks continues to rise but the reward decreases. We should be able to identify when we are at this so called "certain point" because it would be pointless to expose ourselves in greater risks but would not give you the expected greater reward.On the other hand, we can consider the risk and the reward as independent to the other. The thought that I was trying to convey, the book rather, is that the amount of reward/profit isn't always determined by how much the risk there is which is very unlike to what most of the people had believed.
I think what the author imply in this:
Nothing new here, and as a rule of thumb, you don't need to over complicate things. I think this philosophy has been one of crypto tenet's: DYOR (Do Your Own Research). Which is very true, to minimized risk and to have a chance of greater reward, then obviously, you should do everything at your control and research first and not follow the hype around a project, simply as that.
And this what separates a good investors but an average one, you just pour their money on projects they haven't check out, but just throwing their money and then bitch around when they lost when the projects died, exit scam or just be used for pump-and-dump.
Quote
The same is true for investing. Research every stock you buy, every investment you make. Don’t follow the hype, don’t trust talking heads, don’t rely on hunches or instinct, don’t follow one or two simple rules/factors and ignore everything else about your investments. Remember that risk and reward are on a curve, and reach for the top of that curve. That’s the way to win the investment game.
Nothing new here, and as a rule of thumb, you don't need to over complicate things. I think this philosophy has been one of crypto tenet's: DYOR (Do Your Own Research). Which is very true, to minimized risk and to have a chance of greater reward, then obviously, you should do everything at your control and research first and not follow the hype around a project, simply as that.
And this what separates a good investors but an average one, you just pour their money on projects they haven't check out, but just throwing their money and then bitch around when they lost when the projects died, exit scam or just be used for pump-and-dump.
~snip~
The book I had the opportunity to read it and it is very good, especially for those people who are beginning in the world of investment, it is highly recommended for them, however the point you touch is essential, many believe that by betting a lot they have guaranteed the success, and look down on those who trade poorly and make little profit, what I have learned is that trading should be seen as a business and not a means of getting rich overnight, since that way it fails.
Majority would really fail if they do really have that kind of mindset where treating business just like a gamble where anything had been rushed and doesnt think
about long term prospect.I agree that it always been like this when in talks about risk and ratio matters but i do agree on the sentiment above.
When you are already tying up maximum intelligence and skills then there's really the probability but most of the time even you do apply this two and you have
risk up something big then attaining this goal isnt possible.
Absolutely, but sometimes they correlate. A trader with the needed skills and the technical known how will make a good reward from a higher risk trade and come out safe. Many have seen things differently from others, I have experimented this several times and have came up with good profits at last. During the re-market of cryptocurrency, I bought stellar and one of my friend was laughing my actions but, within some times I made a good returned with over 50% and he was shocked. I took the risk and returned with reward.
The risk is worth taking if you know from your instincts that a particular project will do good. I guess, you risk on stellar because in your mind, you know this project is worth taking risk for. Because if you do not believe in a project, I don't think you will risk your money on it. So basically, it starts within yourself.
Absolutely, but sometimes they correlate. A trader with the needed skills and the technical known how will make a good reward from a higher risk trade and come out safe. Many have seen things differently from others, I have experimented this several times and have came up with good profits at last. During the re-market of cryptocurrency, I bought stellar and one of my friend was laughing my actions but, within some times I made a good returned with over 50% and he was shocked. I took the risk and returned with reward.
Well, cryptocurrencies have historically been seen as both high risk and high rewards.
But over time they have shown that the reward appears to outweigh the risk... Or maybe that's just the survivors bias talking.
I think that it's becoming less clearly whether cryptos are worth the risk in recent year, since they have not maintained the same meteoric growth seen in previous years.
But over time they have shown that the reward appears to outweigh the risk... Or maybe that's just the survivors bias talking.
I think that it's becoming less clearly whether cryptos are worth the risk in recent year, since they have not maintained the same meteoric growth seen in previous years.
I like to support the aspect of the topic and that is really true but as you said, the saying of traders or mindset is the higher the risk the higher the reward. However, I'm looking on the side where a trader has taken a higher risk and at same time losing the trade. That means the higher risk won't really be profiting when the market takes our order out of profit and giving ur losses. This will
take our balance faster than when we take lower risk for lower gain because it sustains us in the market even with losses, we have opportunity of winning again.
Base on the article that I had included in the OP, there are instances where the risk continues to rise but the profit (reward) is declining hence it would pointless to go ahead with the risk if so.take our balance faster than when we take lower risk for lower gain because it sustains us in the market even with losses, we have opportunity of winning again.
What I don't understand with what you said was after the first sentence. Are you trying to say that losses can be a gain to some? If a person fulfilled your sell order which you are implying you had a profit on while the person who bought that exposes himself in a greater risk buying in the price that you think is high and would go downhill, is that what you meant? In my opinion, I think that is true in a sense that it is a part of the market that there are losses made for other to gain from.
I like to support the aspect of the topic and that is really true but as you said, the saying of traders or mindset is the higher the risk the higher the reward. However, I'm looking on the side where a trader has taken a higher risk and at same time losing the trade. That means the higher risk won't really be profiting when the market takes our order out of profit and giving ur losses. This will
take our balance faster than when we take lower risk for lower gain because it sustains us in the market even with losses, we have opportunity of winning again.
take our balance faster than when we take lower risk for lower gain because it sustains us in the market even with losses, we have opportunity of winning again.
According to Benjamin Graham, you don't really have to take a higher risk to achieve a higher reward.
Yesterday, I came by an informative video of the summary of the book "The Intelligent Investor" by Benjamin Graham. What intrigued me the most was when it mentioned that risk and reward aren't always correlated which is very different as what most of us had heard "the higher the risk, the higher the reward." With this new perspective, I have been given a new idea that it is not always the case. There is this quote that I came across in the this informative video:
It might be better for you to watch the video yourself for you to understand it even better. Here is the link to this informative video. As such, I researched further to understand it even better what does it mean. You might find this article helpful.
What does your take in this? How could you apply it in trading cryptocurrencies? Are there any interesting books, articles or an informative video just like what I have mentioned that you might wish to share?
Yesterday, I came by an informative video of the summary of the book "The Intelligent Investor" by Benjamin Graham. What intrigued me the most was when it mentioned that risk and reward aren't always correlated which is very different as what most of us had heard "the higher the risk, the higher the reward." With this new perspective, I have been given a new idea that it is not always the case. There is this quote that I came across in the this informative video:
Quote
"Maximum return is not achieved by taking maximum risk, but rather by exercising maximum intelligence and skill."
It might be better for you to watch the video yourself for you to understand it even better. Here is the link to this informative video. As such, I researched further to understand it even better what does it mean. You might find this article helpful.
What does your take in this? How could you apply it in trading cryptocurrencies? Are there any interesting books, articles or an informative video just like what I have mentioned that you might wish to share?
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