Hi guys, hi from Andrea Unger, is trading dangerous?
Yes, no… it’s dangerous, we consider it dangerous especially if we don’t know what it is all about.
Recently we read some news, sad news about somebody who committed suicide because of the wrong speculation on Cryptos.
So the point is that things become dangerous when we don’t know what we are doing.
Many people, unfortunately, face trading without even knowing the instruments, without even knowing what happens during the moves of the markets.
So they don’t even know the structure of an instrument, a stock may be easy to understand, but people also trade futures, options, whatever and so all these things increase the danger of doing something that you don’t know what’s going on in the truth.
In reality, I don’t know if in the truth is correct, sorry!
So you have first to study, first to understand what it is all about, understand the instruments, all the underlings, then understand how markets move.
You have two different things to understand, if you have to drive a car you have to understand how the car works, how you accelerate, how you brake and so on, and then you have to understand how to move in the streets, how to be careful about all the other people around you.
You won’t consider driving dangerous probably because you do it every day, but if you’re drunk, if you drive in bad weather conditions, if you run too fast, then you might consider that it is dangerous.
So you understand that if you do something that you don’t know, that you don’t have under control, you are in danger and from this point of view also trading is dangerous.
So the answer is: Okay, that means that you need to be an expert so to no longer be in danger?
So experts are not in danger?
No, they are!
Experts are also in danger because experts most often under evaluate particular cases that might occur in the markets.
This is something I do myself, so I’m not saying that most people are wrong and I have the truth come on, no!
It’s something that as an expert I do and many others do.
The point is that, not only in trading, sometimes you read about problems occurred to somebody who did something that was considered dangerous, and he undervalued some specific little thing, and that little thing happened.
The same thing can happen in trading, so when you are an expert, you have to be careful about your feeling an expert and therefore going towards the risk of neglecting some things that might be important.
If it happens once, you might have serious troubles, not necessarily wipe out your account, but certainly, have a bad experience, so you have to take everything into your consideration, which means you have to build proper plans.
People don’t prepare plans and when they prepare plans, in the plan they don’t put the idea that what they are doing could go wrong.
So, if I buy this stock because I think it will get here, they don’t consider: what if it goes down away?
They don’t put it in the “IF THEN ELSE” scenario, just because they are sure, because they watch movies where some incredible wolf of Wall Street has invested, based on I don’t know what kind of things, and they think to move the same way.
It doesn’t work this way!
So you have to put in order all your bricks to build the wall of your plan and you have to stick to the plan.
That’s why I recommend algo trading, algo trading helps us enormously because it makes decisions, you make decisions based on numbers and then you put everything in place again using numbers and you have your plan from A to Z following numerical evidence.
Obviously things can still go wrong, still go bad, there will always be an incredible event that you did not consider, a bomb on your cloud, I don’t know, whatever, but obviously all the risks are really limited to the minimum and you have the ability to put all your knowledge and your plans into action, before being under stress related to the markets.
This is the maximum when everything is put in an automated way, as I do, but there are strategies that still being algo trading, cannot be automated.
Some strategies on options and other things that might not be easily automated and therefore we have to take action manually, so you have to build your plan and to be there and do things when you are supposed to do.
Obviously, when you’re supposed to do something and instead of being ready, you go to have a cup of coffee, you are still in trouble, but this is discipline, so you have to be disciplined as a machine would be if you put all the instruction inside.
Again algo trading is an answer to limiting the risk of trading and making trading less dangerous, making it look normal as driving a car in the traffic of your city.
So, guys, I don’t think trading is dangerous, I think trading could be dangerous.
I think you need to properly evaluate what you’re doing, to do so you need to study duly, to study in depth what you do, where do you do it and how to do it.
Put everything in a plan, put it in a machine and stick to the plan.
Doing so, dangers are limited to do something as anything else in life, only one thing is sure unfortunately and all the rest is still a big question, but you can limit risk and you can make trading something which you won’t consider dangerous anymore.
That’s it guys, I hope it helped, please write down what mistakes you did and what you feel makes trading dangerous if you think it is.
Ciao from Andrea Unger, see you next time, ciao.