The NUMBER ONE reason why most traders and investors lose money in the markets is because they do not understand RISK MANAGEMENT!
Let’s do a little social experiment. If you go into town, or into the city and you ask someone if they know what the stock market is what do you think the majority of them will say?
The majority of them will say “OF COURSE! I wasn’t born yesterday”. Now, the second question I want you to ask them is “do you know how to invest?”.
The majority of them will probably say “Yeah, I go on this little app and I buy a stock and I hold onto it”. You’ll probably have a number of people say “I just have a 401k and IRA account, I don’t trade stocks, it’s risky”.
THENNNNN if you take it a step further and ask them “do you know what risk management is? And did you know that you can make money in a recession / bear market?” The majority of them will have NO idea what you’re talking about.
With that being said, risk management is the reason why traders succeed. Traders are successful at what they do because they know when to close out of their losing positions. Trading stocks and options is risky, there’s no doubt about that, but taking a CALCULATED RISK and closing your losing trades quickly is an essential skill that any trader or investor should have.
If you don’t understand risk management, then you’re bound to get into a trade and hold onto it only to hope that it will go in the direction you want it to go in…. and here at AGC… we don’t hope. We do our best to stick to our plan.
So watch the video above on risk management and if you have any questions feel free to send us an e-mail.