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

A BUILDING-BLOCK APPROACH

The goal of this book is to provide you with the fundamental and applicable knowledge required to implement risk management principles in your trading. Ultimately the objective is to see vast improvement in trading performance and management of your operation. In order to implement and apply a solid risk-based strategy, it is essential to have an advanced understanding of risk theory and to continuously apply the steps within the risk management process. The book is therefore structured in three parts that build upon one another.

Part I acts as a foundation course for the reader to understand how we define risk and to understand the risk management process. The book discusses this five-step process extensively, because it is essential to have a thorough understanding of the decision-making process before attempting to apply the principles to your trading. In addition, enterprise risk management models will also be introduced as an effective methodology to protect trade management as well as the entire pool of risks that can affect your trading business. Whether you are a sole-entity trader trying to make it big or a structured firm seeking to optimize operational efficiency, the use of ERM models in your trading plan can improve your key performance results in a relatively short period of time.

Once you have obtained a solid understanding of the risk management process, Part II advances toward the level of utilizing practical applications to manage and ...