Returns = Risk Repost

Here is my long promised post regarding my personal risk equation:

Returns = Risk

How was I able to know that this equation is true?

My recent trading history accurately shows how it my account was almost wiped out by this equation.

The recent run by the carry trade unwinding has caused my trades to load up on pips. This then gave me the confidence to take on more risks. The unwinding continued and I am getting larger returns. And then came that day when the returns got so crazy that I added more lots which means more risk. More returns begets more risk. But hey the markets just halted and said "Wait a minute, maybe we are over-reacting". The market floored! But I did not stop there I kept playing catch up and trading max lots. Of course playing catch up does not work. I got wiped out. I was taught one of the bigger lesson in trading life, which is not to be too greedy/risky.

And that is how I applied the risk/return equation. Ouch!