"The greatest obstacle to discovering the shape of the earth, the continents, and the oceans was not ignorance but the illusion of knowledge." - Daniel J. Boorstin
I came across this interesting quote above . And I feel it is applicable to trading and investing. How many investors and traders will place a wager of a small fortune on certain knowledge they knew about? I think a lot of them would. They would become so certain of their knowledge that a filter is established in their minds that allows only like and supporting evidence to their existing knowledge. They may ignore contradicting facts or diminish them to a small corner of their minds. Great fortunes can be made this way or lost...
How does this relate to trading?
Risk. At different phases of our lives, our appetite for risk tend to change. For me, for now and later, I like to risk small for bigger gains. Preferably measurable as reward to risk ratio of at least 2:1.
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