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The Truth About Risk Management in Trading

You know what? The conventional wisdom of most financial planners is, “The higher the return, the higher the risk.” But that’s not entirely true. The truth is: The lower your financial intelligence, the higher your risk; and the higher your financial intelligence, the lower the risk. Risk is not knowing what you are doing.
So many people mistakenly think that investing is risky, when in reality it’s the investor who is risky. Think about it: An investment is just an investment, whether it’s a business, a property, a stock share, or a commodity. It’s you, the investor, who determines if a specific investment is a good or bad investment for you.
Let me put this way: Is a car going 25 miles per hour driven by an experienced driver risky? Probably not. Take the same car and the same speed driven by a drunk driver and that same car becomes a weapon. It’s not the car; it’s the driver. It’s not the investment; it’s the investor.
Now, in the world of investing, there are no investments that are 100% guaranteed to be safe (free from losses), but there are things you can do to reduce the risk and increase the safety:
--Give yourself a financial education
--Gain hands-on experience by actively investing your money
--Understand the investment and the return on the investment
--Have control over your investments

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