The #1 reason traders find it hard to follow their risk management plan. - page 2.

maydna

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Quote from: alkuluku on May 30, 2020, 11:53:11 PM

Quote from: maydna on May 30, 2020, 11:50:54 PM

~snip~

If we stick to a target price then we will need to hold for long term investment and eventually it will decrease our investment risk.
but most people do not understand this.

The fact is most trader become greedy when they see the price jump, and I already experience that before in my beginning of trading. At that moment, I am missing the best moment to sell some coins at the very highest price, and I can make a big profit, but then I realize that the price cannot still increase, but that is too late. Although that is too late, I can make a profit, but that is not bigger than the last time of the highest price.

From that experience, I always try to remember to close the trade whenever I see the very highest price, so my profit can be at the top rate. That is one of the best lessons for me that I always keep in my mind.

Cesar22

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You are absolutely right OP, once a trader starts to be successful, they'll keep on pushing to make more and more money

alkuluku

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Quote from: maydna on May 30, 2020, 11:50:54 PM

I agree with you OP. Greedy is the biggest problem that every trader face, and even the pro trader will have the same problem. But if we still stick on the target price that we want, we will have a chance to eliminate the greed because we know that when the price can jump in a short time, the price will not stay on that price for a long time or the price will not always increase higher than that price.

We need to see when we need to sell the coin, especially if the price can touch the target price want, and don't expect to see the price will always go up more than the target price we have. Yes, it is hard but we need to try more and more so we the greed is not posses us and prevent us to make a profit while we can.

If we stick to a target price then we will need to hold for long term investment and eventually it will decrease our investment risk.
but most people do not understand this.

maydna

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I agree with you OP. Greedy is the biggest problem that every trader face, and even the pro trader will have the same problem. But if we still stick on the target price that we want, we will have a chance to eliminate the greed because we know that when the price can jump in a short time, the price will not stay on that price for a long time or the price will not always increase higher than that price.

We need to see when we need to sell the coin, especially if the price can touch the target price want, and don't expect to see the price will always go up more than the target price we have. Yes, it is hard but we need to try more and more so we the greed is not posses us and prevent us to make a profit while we can.

alkuluku

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Quote from: Bright_dhykseen on May 30, 2020, 05:39:18 PM

Quote from: bigcash2011 on May 30, 2020, 03:18:33 PM

Yeah we can say that greed and ego are the two biggest factors that force the traders psychology not to use risk management and not to use stop loss or cut losses. It has been seen that people have burnt their accounts multiple times but still they are hesitant to use proper money mangement strategies out of greed and their egoistic approach.

Yes, you're right. Ego is one big thing.

I always had an ego for a very long time in trading. Till realized I needed to do the needful to be successful as a trader.

greed is the biggest thing for traders which increases risk for them.

Wexnident

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Greed isn't that negative of an attitude. Although it is mostly negative at times (if it goes overboard), it can be actually helpful sometimes, so fully blaming Greed isn't entirely correct, but it isn't entirely wrong either. Risk management plans are in the end, just plans, and plans are bound to change IF and only IF someone actually understands how the market works.

There are times that you need to trade even though your plan says no all because of the fact that there's a chance and a high one at that. IMO, most mistakes that actually happen in trading is because the trader fails to understand the movements, well I mean, no one does most of the time but I'd say that he was just unlucky it didn't go as what he planned. IT is important though that he could minimize any losses that he got from changing plans though.

P.S. OP your BTC profile link in your linked post doesn't work. Just sayin.

AmoreJaz

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Quote from: Lorokan on May 30, 2020, 06:20:32 PM

I may have a different opinion, but i believe that most times it is not about ego or greed when risk management fails.
Most times during trading, the market moves away from the predicted movement and does something entirely, which SL cannot stop, and it doesn't matter if you run a risk management plan or not.

it may be true but most traders of course wanted good returns during their trading, so they always predict in favour of them. they act according to what they thought will happen but its the other way around. if a trader will just be conservative with his calculations, he will not lose a lot of money, if in case he will lose that particular trade. but of course, the reality is different.
when you are already in the market, you suddenly change your decisions for the hope that you will get more money. i think thats where most failed, changing their strategies when they are already in the trading market.

Lorokan

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I may have a different opinion, but i believe that most times it is not about ego or greed when risk management fails.
Most times during trading, the market moves away from the predicted movement and does something entirely, which SL cannot stop, and it doesn't matter if you run a risk management plan or not.

Bright_dhykseen

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Quote from: bigcash2011 on May 30, 2020, 03:18:33 PM

Yeah we can say that greed and ego are the two biggest factors that force the traders psychology not to use risk management and not to use stop loss or cut losses. It has been seen that people have burnt their accounts multiple times but still they are hesitant to use proper money mangement strategies out of greed and their egoistic approach.

Yes, you're right. Ego is one big thing.

I always had an ego for a very long time in trading. Till realized I needed to do the needful to be successful as a trader.

bigcash2011

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Yeah we can say that greed and ego are the two biggest factors that force the traders psychology not to use risk management and not to use stop loss or cut losses. It has been seen that people have burnt their accounts multiple times but still they are hesitant to use proper money mangement strategies out of greed and their egoistic approach.

Bright_dhykseen

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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! Cheesy

Topic: The #1 reason traders find it hard to follow their risk management plan. - page 2. (Read 397 times)