Short excerpt from a trading-focused YouTube video arguing that traders can only manage risk, not trade outcomes. The speaker emphasizes sizing positions so that losses on any single trade are acceptable, advocates thinking in terms of potential loss rather than potential profit, and encourages traders to accept and learn from inevitable losses.
Our job as traders is to manage risk. That is the only thing we can manage. We cannot manage the outcome of a trade. We cannot manage if a trade will go higher or lower. We can take a trade based on our edge, based on the probability of us believing that this trade will go higher, but we cannot control the outcome. If I do take this trade and I am wrong, what is that appropriate position, size that I should take? Where if I'm wrong, I can lose the 200. I can lose the 2,000. Now, most traders, when they enter a trade, they immediately look at the trade from. Oh, Matt. Oh, man, when I take this trade, I'm going to make $2,000 or I'm going to make $4,000. And that's not a good approach. The approach that I take in every single trade is if I take this trade and I'm wrong, I will lose 500 or I will lose 5,000. Am I okay on losing 5,000? Of course, no one is naturally okay on losing money. But once again, in trading, you will lose money. It will happen. You have to become a good loser.
