EP 97: Why Most Traders Fail at Risk Management -

In this episode of The Wall Street Coach Podcast, host Kim Ann Curtin welcomes back trading expert Brian Lee to tackle “Common Misconceptions About Risk.” Brian, a seasoned trader, delves into the pervasive myth that to make a lot, one must risk a lot. He emphasizes that risk is an ever-present factor, regardless of a trader’s experience level. Brian explains how improper risk management, such as risking large percentages of one’s account on a single trade, can lead to significant losses that are hard to recover from due to the concept of geometric returns and losses.

He advocates for consistent position sizing, highlighting that even risking a small percentage like 1% can reliably compound over time without exposing the trader to devastating losses. This episode sheds light on the importance of sticking to a well-thought-out risk management strategy, even during winning streaks, to avoid the pitfalls of overconfidence. Brian also reflects on his own journey, recognizing the critical importance of risk management early in his career, a lesson he shares to help both novice and experienced traders navigate the complexities of trading. This discussion is a must-listen for anyone looking to enhance their trading strategy and safeguard their investments.

Check out another interview with Brian here.