What kind of risk you are

The playbook this site is built on contains a short exercise: two questions about where you would take money from, and where you would give it away, if you could do it repeatedly. The answers sort people into four groups — and the group is the least useful part of the result.

Mak · 3 min read · Stage 10, article 3 of 4

The four

Profile	The tendency	What it has to learn
The risk-taker	Takes risk even where none is needed, and tries to grow the account quickly by putting it at stake.	Limits, and the difference between a risk that is paid for and one that is simply taken.
The steady one	Avoids risk on principle, prefers certainty. Handles losses calmly and rarely tilts.	That too little risk is also a way to lose — slowly, to costs. The article on what trading really costs is the arithmetic.
The optimist	Hopes to be lucky and to avoid losses altogether. Not actually prepared to take one.	That a loss is not a mistake. This profile is the most prone to tilt, because every loss arrives as a surprise.
The one who manages risk	Takes risk deliberately, in known amounts, and handles the outcome either way.	Nothing new about risk — and everything in the other nine stages of this path.

The two that surprise people

The risk-taker is obvious and everybody expects it. The other two are the interesting ones.

The steady one loses too, which is counter-intuitive. Trading small enough that nothing can go wrong also means trading small enough that the costs are a large share of every result. That is not caution; it is a different way of paying for the same seat, and it is invisible because no single day looks bad.

The optimist is the most exposed of the four. Hoping to avoid losses is not a risk setting, it is the absence of one — so when a loss arrives, there is no plan underneath it, and every mechanism from the previous article activates at once.

Diagram 1. How much risk you take is a number you can change this afternoon. Whether you chose it is the part that decides everything else.

Why the label is the least useful part

Read the table again as a description of habits rather than of people, and it becomes usable.

This is not a personality test. It measures what you currently do, and what you currently do is the part that changes.

The same correction applied in the second stage of this path, to what kind of trader you are: the value is not the category, it is the specific thing the category tells you to work on. Somebody who takes risk without choosing it does not need a new personality — they need a written limit, which the first article of this stage supplies.

And the honest caution about all such exercises: most people answer them as the person they would like to be. The reliable version of this test is not the questionnaire at all. It is the record of what you actually did, which is the last article of this stage.