Stop Overthinking: The One Risk Rule That Changes Everything
From Stress to Clarity:
Why Risk Definition Is a Trader’s Best Friend
Paul Tudor Jones said something in the original Market Wizards book that I think about a lot…
“I always define my risk, and I don’t have to worry about it.”
On the surface, it seems simple, right?
Almost like saying, “Know where your stop is before you take a trade”
Common sense. Level 1 trading.
But…there’s more to it than meets the eye.
PEACE
Most traders think risk management is just about protecting capital. But what if it’s also about protecting your mind?
Think about it right, how much stress, anxiety, and frustration in trading comes from uncertainty?
- The “should I hold or cut?” panic…
- The “I’ll just move my stop a bit” excuse…
- The “Maybe it’ll turn around” hope…
We’ve all been there. And it never serves us.
PTJ? He doesn’t deal with that.
Before he even clicks buy, he already knows his exit, if it works, great. If it doesn’t, no problem. He’s out.
No emotional drain. No second-guessing. No stress.
That’s real peace in trading.
And when your mind is clear, you make better trading decisions.
Most traders think they want more winning trades…
But what they really need is more mental clarity.
Define your risk. Find peace.