Risk is something inherent in any investment and business that we can imagine, but this is even more true when we talk about investments and trading in the financial and cryptographic markets, because the factor multiplies exponentially speaking.
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It can be defined or described in many ways, but in short, it refers to our ability to take risks in favor of a beneficial position, but calculating all the possible variants of said risk, in order to anticipate possible adverse scenarios.
Basically, the calculated risk refers to the capacity for decision and action; and it is something present in everything in life. If we want to take an action to get a benefit, we must anticipate what can go wrong; Because (if we decide to believe to Murphy´s Law) “Everything that can go wrong, does.”
So, if we are aware of the possible risks, we will make the best decisions, and we will be attentive to possible contingencies; and an example of this is seen in anything in life, but to mention a few; When a general makes a decision to attack the enemy, it is assuming a risk, but it will be a calculated risk to the extent that it is able to foresee all the possible consequences of its actions.
Chess masters and grandmasters are experts in all of this calculated risk, because any move they make on the board is generally coldly calculated; and even so, many times positions and situations are generated in the games that even surprise them.
A manager of a company who wants to open new branches of the company in a new city, must also be prepared to face new risks and challenges, and whether or not he succeeds will depend on his ability to anticipate possible situations ( positive and negative) that may be generated in the process.
Likewise, an investor who makes the decision to buy this or that cryptocurrency must be prepared to know how to manage his capital in such a way that he does not risk too much of losing everything in case the investment goes wrong; that is, in case the cryptocurrency goes bankrupt.
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This is a real science, but basically, as I already said, everything is based on foreseeing the worst scenarios and preparing in advance for the consequences. To do this, it is necessary to ask ourselves the right questions, such as "If I am going to invest in this cryptocurrency, what will happen if said crypto goes down the drain?"
Based on that question, perhaps we should also ask ourselves, "how likely is this cryptocurrency to go down the drain?" if the answer is "I don't know exactly, and there is no exact way to know", then perhaps we will think about reconsidering our situation and perhaps we will decide to reduce; or measure well the amount of capital that we are willing to risk in the purchase of said cryptocurrency .
The key in all this calculated risk is knowing how to face the consequences of our movements and actions in life and in business. If we can anticipate that something can go wrong, as much as it can go right, we can anticipate, and in advance, we can alleviate any possible bad consequences that may arise from the actions undertaken.
Entrepreneurs, doctors, lawyers, investors, the military, chess masters, firefighters, police, etc. Basically, any person exercising any profession or activity that we can think of, must have the ability to assume calculated risks; because this will define the success they can obtain in their activities respectively. So, calculated risk is not only useful, but also necessary in anything that involves uncertainty.
Because as the famous saying "Hope for the best, but prepare for the worst". And no, the calculated risk does not refer to being pessimistic, but to having the good judgment and common sense to understand that sometimes the forecasts can go wrong and we must be prepared to make the best decisions in the process.
The calculated risk then allows us to make advance plans that will allow us to better face the possible vicissitudes that arise as a result of our decisions. Here is its importance.
What do you think about this whole topic?
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@piensocrates