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Risk first: questions before a trading decision
THE PHANTOM PLAYBOOK · INTRODUCTORY READING
Before asking what a trade might earn, ask what you understand about the product and its risks. Different instruments create different obligations. A familiar brand name or a rising price does not answer those questions.
Write down what you know.
- What exactly would you own, or what contract would you enter?
- What fees, dates, and obligations apply?
- What circumstances could create a loss?
- What information is missing from your explanation?
Separate a view from a plan.
“I think the price will rise” is a view. It does not explain the instrument, the amount at risk, or what would change your reasoning. Use those gaps as a reading list rather than filling them with confidence.
Practice prompt: explain a product to someone without using the words “easy,” “safe,” or “guaranteed.” Where does your explanation become uncertain?
Keep a decision journal.
Record your question, the sources you consulted, the assumptions you made, and what you learned afterward. A journal is a learning tool, not evidence that a strategy will succeed.