It is important to know our risk tolerance
Greetings Project Hope friends, I hope you are all very well.
Today brings me here a topic that I wanted to share since I was reading about it a few days ago, and it is regarding the tolerance to risk in trading and investments in general.
As it is very well known, every investment, every business, carries an implicit risk, and the detail is that even though everybody knows it, the reality is that not everybody assumes it completely.
Because even though we know that when we put money in something we know that there is the possibility of losing a part of it or even the whole investment.
This is important to always keep in mind and as important as this is to know what is the level of risk that we are able to tolerate, how much is the maximum that we would be willing to risk in a business, or even in the same trade, in the case of people who are dedicated to trading.
The risk is always implicit.
Knowing what percentage of a capital we are willing to lose if things do not go well in the business is essential to have peace of mind, because it often happens that there are those who only want to win and seem to lose sight of the fact that losing is within the possibilities.
For example, if we have a capital of 10,000 dollars, and we want to go into business, how much is the maximum we would be willing to lose without our mind playing against us? 10%,30%?
That will obviously depend on many factors, I have seen people who have a large capital and risking a small percentage does not mean anything to them, but if it is someone who only has that $10k, and it has taken him years to raise, he will certainly not want to take a risk.
That is why I say that it is necessary to know ourselves and to know how losing a certain amount of money will affect us emotionally and in our life in general, because that implies the "risk tolerance " I am talking about, and that undoubtedly we must ask ourselves about this before investing in something, always keeping in mind that just as we can win, we can also lose, and the latter is necessary to define it very well. Greetings.