There’s a special coin in your hands.
Every time it comes up heads, you win $2. And every time it comes up tails, I win $1.
Now in the long run, who will win?
You, of course! Because you have a mathematical edge over me.
And it doesn’t matter whether you’re gambling at a casino, betting on horses, or trading the financial markets.
If you want to make money from speculation, you must have an edge over the other players (or the house).
But what about risk management and trading psychology?
It matters, but not as much as you think.
Because without an edge in the markets, even the best risk management or trading psychology won’t save your account.