Understanding 'Risk Management & Trading Psychology'

The Orientation Note

Risk management is more than what you think. It goes beyond the traditional topics of stop-loss, position-sizing, and leverage. Trading …

A Brief note on The Risk (Part 01)

In the stock market context, the risk is defined as the "probability to lose money". You are at risk when …

A Brief note on The Risk (Part 02)

Portfolio Variance is a way to understand portfolio risk. As a measure of risk, I hope you are familiar with …

A Brief note on The Risk (Part 03)

This module began with a discussion about the two types of risk that market participants are exposed to when they …

A Brief note on The Risk (Part 04)

The variance-covariance matrix was calculated successfully in the previous chapter. These numbers, as we have discussed, are too small to …

The Equity Curve

This chapter continues the discussion that was panned out in previous chapters. This chapter is contextualized. If you're reading this …

The Expected Returns

These chapters will provide valuable insight, particularly for those who are not familiar with portfolio techniques. We will explore the …

The Portfolio Optimization

We've spent a lot of time and effort trying to understand the risk associated with a portfolio. We have reached …

The Portfolio Optimization (Part 02)

The previous chapter introduced the idea of portfolio optimization with excel's solver. This chapter will continue to build on that …

The Value at Risk

Let's begin this chapter by flashbacking. Many of us can relate to the great rock and pop music produced around …

The Position sizing for Active Trader

If you don't understand the gambler's fallacy, it is when you bet on an outcome and have a long streak …

The Position sizing for Active Trader (Part 02)

The purpose of position sizing is to determine how much capital you can expose to a trade given that you …

The Position sizing for Active Trader (Part 03)

In the previous chapter, we addressed a crucial concept. We examined three different models to determine how equity can be …

The Kelly’s Criterion

The percentage risk method is based on your own estimation of the 'loss' you are willing to take for a …

Understanding Trading Biases

Although markets are complex, the tools to analyze them need not be complicated Traders will often overcomplicate their charts subconsciously …

Understanding Trading Biases (Part 02)

Anchoring Bias is a well-known trick that tricks trader/investors to get them to the first piece information. Anchoring Bias can …

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