Risk Personality: Discover Your Trading DNA
Risk Perception, Risk Type and Risk Behavior - get to know yourself!
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Our comfort zones shape the way we approach risks in life.
Some individuals are more comfortable playing big, while others are more risk-averse.
In trading, no correlation exists between risk tolerance and profitability!
Actually, your risk type doesn’t matter as long as it’s congruent with your trading approach. This means that if you know yourself and your risk tolerance, you have a much better chance of becoming successful long-term.
You can be an excellent swimmer, whether a high diver or a synchronized swimmer. You can become a highly successful fighter, whether a boxer or a jiu-jitsu athlete. You can become an awesome runner whether you prefer to sprint or marathon. And you can become a successful trader no matter your risk tolerance.
Your chances of success increase exponentially once you know yourself and adapt your trading to your risk profile. Self-knowledge grants you the best edge in life and in the markets.
The struggle with many traders is the lack of knowledge about their risk type on the one hand and the forcing trading approaches that are not compatible with their personalities on the other.
While adjusting your risk tolerance in the market is possible, the first step is gaining awareness about it!
This newsletter aims to give you that understanding. We’ll explore the depths of risk perception, the three factors influencing risk behavior, how passion influences risk-taking, and guide you in discovering your unique risk type. By the end of this read, you will have gained extra awareness of yourself and your attitudes towards risk.
Let’s broaden your self-knowledge!