Trading Bait

 So I was talking to my trading psychologist this morning and she came up with an analogy or metaphor for trading that I liked. And before you go thinking I have the money for a trading psychologist, you must understand that it is my significant other who is my trading psychologist :) I'm lucky. So we were talking about the "cost" of trading or the risk part. I usually describe this as knowing how much I can lose - which it is. You have to have a stop loss in or be extremely good at hitting out in order to actually know your risk. As I've read in many books, this is one of the only things that you can really determine. What happens with the stock and where the price moves is not up to you (not throwing lots of millions or billions at these short trades).  So we're talking about risk and how you have to know what you can lose and she changed the wording a bit and I liked it. She said the risk is like the bait. And you don't do good fishing without a good bait (a fly hook is still bait). Same thing with trading - no set bait - no fishing should be done. And if you try without the bait...well...not much good happens. Probably just waste some time and money on gas. The whole point is you can't go into a trade without the elements that you need to make a good trade. And one of those necessary elements is your trading bait (set risk for a trade). If you have that then you're fishin'... uhm...erm... trading correctly. Otherwise you're just throwing metal into water and wasting away.  So there you have it. I liked it because it just makes sense. You don't fish without bait and you don't trade without a stop. Here's to good fishing! Cheers!