Any discussion of trading must include the topic of risk. It is risk, or rather the misunderstanding and misapplication of it, that most often trips up new traders, preventing them from ever becoming old traders.
As in any other part of life, you have to be prepared to face a negative to be able to achieve a significant positive. We take risks in our lives all the time. We generally do so in a fairly controlled fashion, though, with a degree of surety as to the outcome.
Trading should be the same. Unfortunately, it often does not end up being that way.
Risk, in trading parlance, is defined by many people in the markets
as the chance of a negative outcome taking place. It is often thought of in terms of losing money on a single trade or position, but it just as well can be applied to the aggregate of a collection of trades – one’s performance over time. Actually, it is the latter idea that should be the one you focus on most.


Read more at http://dlpromanager.com/2012/02/risk...rading-part-1/