1.1 - A unique opportunity

Stockmarketbox's new module is exciting. It will cover two closely related market topics, namely 'Risk Management' and 'Trading Psychology'. Although risk management seems simple, psychology can be boring. Both of these topics could open up new avenues for trading, I promise. For example, risk management is more than what you think. It goes beyond the traditional topics of stop-loss, position-sizing, and leverage. Trading psychology is an outcome of your actions in markets. It helps you to look back and discover why or how you made a profit in a trade or investment.

These topics are so extensive that I tried to find ideas for how to structure the module and which chapters to include. To my surprise, there were no topics related to them. Although there is a lot of information online, it is scattered and lacking continuity. This presents us with the chance and responsibility to create reliable content on these topics that is centered in India. This will require us to work together as a team - we will be responsible for posting the content, and you will need to add queries and comments to it.

1.2 - What can you expect?

This stage will give you an overview of what to expect. However, as we move forward, I may alter the learning method if necessary, but not too much.

We are focusing on 2 topics here.

1. Risk Management
2. Trading psychology

The market position you are in will affect the risk management techniques that you use. If you only have one position in the market, your risk management approach will be very different from the risk management strategies of multiple positions. This is also completely different than the risk management techniques for a portfolio.

We will therefore look at risk management from many angles.

1. Risk Management starting with a single trading position
2. Multiple trading positions can pose risks
3. Portfolio risk management

To explain this, I will discuss the following topics:

1. The risk of taking on too many forms
2. Position sizing – this is mandatory to cover
3. Single position risk
4. Hedging and multiple position risk
5. Options hedge
6. Risk estimation and portfolio attributes
7. Value at Risk
8. The impact of asset allocation on returns and risk
9. Portfolio equity curve insights

These topics should give you a new perspective on risk management.

We would also discuss trading psychology from both a trader's and investor's perspectives. Discussion would focus on cognitive biases, mental models, and common pitfalls. It will also discuss the thought processes that lead to these pitfalls. These are just a few of the topics that we will be covering in this section.

1. Anchoring bias
2. Regency bias
3. Confirmation bias
4. Bandwagon effect
5. Loss aversion
6. Control illusion
7. Hindsight bias

We will continue to build on this. It will be a fun discussion.

Keep watching.