The Risk of Trading: Mastering the Most Important Element in Financial Speculation

Michael Toma

2020年7月 · Gildan Media · 讲述者：David McCarthy

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The Risk of Trading takes an in-depth look at the challenges traders have in regards to one of the most critical facets of trading: risk management. The book takes a magnifying look at risk that every trader needs to have and understand in order to be successful in trading. Most traders look at risk in terms of a "stop-loss" that enables them to exit a losing trade quickly. In The Risk of Trading, Michael Toma explains that risk is ever-present in every aspect of trading and advocates that traders adopt a more comprehensive view of risk that encompasses the strategic trading plan; account size; drawdowns; maximum possible losses; psychological capital; and crisis management. He advocates that traders conduct a detailed statistical analysis of their methodology through backtesting and real-time results so as to identify when the methodology may be breaking down in actual trading. Ultimately, Toma asserts, traders should look at themselves more as project managers who are constantly managing risk rather than gamblers placing bets and hoping over time to come out ahead. In so doing, traders will begin to operate more as business managers and are much likely to avoid market-busting losses and achieve consistently good results.