Understanding the balance between risk and potential
When entering the market, it's not just about seeking gains, but understanding what you're risking to obtain them. This is where an essential concept comes into play: the risk/reward ratio.
Before each position, it's useful to ask a simple question: "Am I willing to risk 1 to hope to gain how much?" Whether it's 2, 3, or more, this ratio helps make more structured decisions and avoid emotional choices.
It's not a guarantee of success, but a mental compass for better managing the uncertainties of the market.