Private Trader - My Portfolio and Risk Management

Educational only. This Market Log entry reflects the personal market views and interpretations of a private trader investing only their own capital. It is impersonal, does not consider your objectives, financial situation, or needs, and does not constitute financial advice, financial planning, portfolio management, or a recommendation or solicitation to buy or sell any security. All content is for educational and informational purposes only.

Date published: 2025-09-20

Sup folks and welcome back!

Septembers almost over, and we've 3 months left to go before the end of 2025; to me, its really unclear how things could play out, we've so many catalysts, both good and bad, that could sway so many things and cause multiple chain-effects, so its really really critical your risk management is solid.

Whats the risk?

Quite simply, the risk here, is loosing 100% of your entire portfolio; but wait a second, how can you loose that? We'll, by having insane risk! If you ask yourself

"If my investments/trades go sideways, if my plays go in the opposite direction, what is the risk to my account?"

For example:

• If your playing 0DTEs, options, shorts, then naturally, your risk is on the significantly higher side

Alternatively:

• If your playing stocks, as in directly purchasing open-market available shares, then your risk is significantly reduced compared to the above, however, risk is still very much there. And the main determiner of risk, is YOU; you are the one that "accepts" the risk of whatever investment/trade your doing, and if your unaware, turn a blind-eye or else, then your effectively not in tune with what you should tune in to your mind

How do I manage risk within my portfolio?

When I first started back in 2020, I had absolutely no idea what risk is, what risk management is, or what are the risks of doing this or that; it was always a blur, and due to inexperience, causes so many to say "It takes years to become profitable"; I am in absolute disagreement to this phrase, as time in the market is only ONE SINGLE indicator among many that your "equation" should include. The other for example, is trades in the market.

To keep it simple, its very difficult to understand risk unless your experienced, hence the need to "experience" as much as possible without destroying your portfolio.

You define your experience parameters, and your parameters mean NOTHING unless you learn each and every single time; your equation has no value unless you update your own learning experience from a 1.0 to a 1.1 to a 1.5 to a 2.0 version and so on

The difference between a 1.0 edition experience and a 2.0 edition experience is only determined by your own learning, and the "eureka" moments you experience within your learning journey. That "eureka" moment is a full-fledged jump from a 1.0 to a 2.0 (as opposed to a 1.0 to a 1.2 etc). These eureka moments are ones that you must strive to obtain, and I reiterate, can only come from your own brain, your own approach and your open-mindedness to change!

As I mentioned in previous posts, your "ego" is your #1 enemy; and this prevents your learning, and in turn your experience, and in turn your portfolio...

My portfolio and its current risk management

From 2020 to present, my risk management has changed significantly, and continues to change and evolve on, currently, on a month-to-month basis. I never make rash decisions, I take my time, I never short, I never play options, I never do anything that could effectively eliminate a portion of my portfolio in a blink of an eye.

This DOES NOT MEAN that risk is eliminated, no; however this does mean that I have, within my own risk management approach, significantly reduced that severity of the potential risk, thus automatically places me higher within the "potential to make profit" category. Of course, theres so many more to include within this category but lets keep things simple and not dive deep into it, its frankly not needed. Why? Because diving deeper means "fine-tuning" and these are small calibrations that have MASSIVE impact but are really evident when you become more experienced.

Your experience becomes that fine-tuning knob; if and only if your open to lifelong learning

Hence my approach is purchasing open-market publicly available shares, if XYZ is $10/share, then thats what I go for; that and NOTHING else whatsoever of any kind; regardless of my equation and where it stands, I simply will not go for anything else

The shift in my perception of how I understand risk and go about it, was a "eureka" moment for me. Its critical you find yours and there's no one way in getting these eurekas, there's an infinite amount of these as it also ties into, in simple words, your "investment personality", or the hat-you-wear-when-you-trade.

Risk management and consistency

What on earth is risk management and consistency! Think of it this way, if you made 10 trades in the year, how many of them did you end up exiting "positive" aka, with PROFIT. Is it 10% of your trades? Is it 50% of your trades?

Even if you exited 90% of your trades with PROFIT, your risk management could be atrocious as the remaining 10% could have the majority of your entire portfolio.

In this case, your win-rate has absolutely no bearing as your risk management is not properly aligned/balanced; with experience, you have a stronger foundation in knowing how best to manage your risk. and remember, if your aim is to go from zero to hero quickly, then your risk is off-the-charts, you must find a balance and the balance is only determined by you and only you. You can ask a million people what to invest in, they'll all tell you whats best, but in the end, you have absolutely no understanding on THEIR risk management; you might win here and there etc, congrats, but eventually, your on a vicious cycle if you dont create your own approach/method/way

My approach as of today, and how I currently align my risk management

Currently, I have around 10-20 stocks at any given time throughout the year; and given I trade 50-100 times a year, means I'm always realigning my risk management constantly depending on various factors within my "equation".

My risk is multifold, as I take into account politics, government, trends, cycles, years, and so on; and use all of these indicators on a "weighted-scale" within my overall equation (one component of this equation is risk management); so before I jump into a trade, it MUST suffice this component, if it DOES NOT, then I immediately move on to another potential, I NEVER "squeeze" my equation as if I do, then I'm simply not following my equation and thus am being absolutely ludicrous. What am I gaining by doing this? Nothing. Whats my risk if I dont follow my equation? Very high.

So standing true to your "equation" is a significant part of your risk management, that's aside/separate from the equation itself! Are ya with me? The more you understand this, the more aligned you are.

Next steps

In my eyes, I positioned my portfolio for the rest of 2025 and even early 2026; as I, many weeks/months ago, was prepping the portfolio for what my hypothesis/thesis/approach is and what I expect to occur in these last months and early 2026.

This isn't done haphazardly and must be very intentional but you must hold true to your approach and remember to realign if needed based on developments in the battlefield; hence why I constantly mention, you must learn constantly, and you must throw your ego away, at least when trading, otherwise your doing yourself a disservice. So ensure you serve yourself!

We're in uncharted territory, and your risk management must be in the very elevated zone, def-con-5 for real; ensure you've cash, ensure your hedged, ensure you find an approach that can be replicated even 10% of the time, and work towards enhancing/improving to aim for 20% of the time and so on; its a multitude of components needed to get there, have the confidence, have the faith in yourself, and more importantly, take your time.

All the best to you all in whatevers upcoming and hope the weeks delicious for all! Peace!