A few years ago I went for a 3 day hike through the Malaysian jungle (home of the King Cobra and Malaysian Tiger).

It was a beautiful place and we really enjoyed “getting back to nature”.

But all was not as it seemed.

Our experienced guide had been taking tourists on jungle treks for years, however even though he knew the landscape well, he was extremely alert. Almost to the point of being nervous.

His sharp and well-trained eyes were constantly scanning the jungle. 

And any rustle in the bushes got his (and our) immediate attention.

But what really stood out to me was not just his high state of alert, but a statement he repeated to us many times:

“The fact that you don’t see any danger right now doesn’t mean it’s not there”.

That connected with me, not just because I wanted to get home alive, but also how it applies to trading too.

Many traders don’t think about the possible risks when things are going well.

And some even believe they’ve figured the market out, or their trading performance will last forever.

But market dangers are always exposed (eventually).

And that’s ok, because that’s how we learn and keep becoming better traders. After being burned several times, I finally learned an important lesson:

If things are going extremely well in the markets, work on your risk management more than ever.

Period.

Stop thinking you’re a genius that’s figured trading out, and start thinking about what could possibly go wrong instead. 

Consider how you could protect your trading account, and do it before it’s too late.

Just like in the jungle, traders need to be alert and always prepared.

Keep working on your risk management and drawdowns, whatever is happening in the markets. That’s the best way to make sure you stay in the trading game for a long, long time.

And keep in mind:

“The fact that you don’t see any danger right now doesn’t mean it’s not there”.

Trade to survive,

Tomas

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