hello my name is SEAN VENGAN and today's in ninth of August 2017 now let me ask you a question what business is McDonald's in? well you may reply and say well that's obvious they're in the fast-food industry selling hamburgers and fizzy drinks and they also franchise their operations well actually it's not they actually buy prime property in prime locations and that's their core business now in trading there are many traders who fail it's something like 95% plus who fail in trading and that's because they do not understand their core business now you may say to me that you just do trading as a hobby and that's a fine and this question you don't need to ask however if you want to take trading seriously and make a serious amount of money in trading then you need to treat it like a business so the question is what business is trading in in today's video I'm going to give you the secret to understanding how to be successful in trading by understanding your business operation on the surface of it it looks as though our business is that of making money after all as traders isn't that what we want profit but that's not our business that's our goal which is no different than any other business whether it's a barber shop a supermarket a car repair shop a dentistry they all want to make money but that's not their business our business is the business of risk and I'm going to show you in this video why we need to understand that we're in the business of risk now traders fail to make this vital distinction because they have not paid enough respect to risk but let's step back a bit and let's examine risk and reward as it relates to business ventures here we see four types of business ventures the first one is cash in the bank here we see that there's low risk and therefore low rewards so maybe we'll get at current rates maybe 1 2 % but it's a safe bet the next risk is property investment here the risk goes higher but the rewards also get higher but it's still quite safe to invest in bricks and mortar the next risk is a business venture this can be quite risky with businesses failing in the first two years so here now the risk has stepped up quite considerably but also if it is successful the rewards can also be there finally we reach the point where we are at which is Bitcoin and altcoin trading now here we assume high risk but also with that comes high rewards so now we understand the profile of risk and reward as it relates at the various businesses we can see that we get paid the highest but we take on the largest risk now for us to understand our risk as traders let us look at the activities of an insurance company because there's a great deal of similarities between an insurance company and trading the whole premise of insurance is that they collect premiums so let's take an example of an insurance company which collects car premiums now the whole premise of collecting those premiums is that the insurance company gets to keep the majority of it so 95% of their clients they collect the premiums from they get to keep only 5% of clients roughly speaking they will make payouts in terms of claims now what do the insurance companies do which we can learn from well what they do is they pick and choose their clients they will choose safe clients those clients who are perhaps middle aged never had an accident in their life they know that they're going to collect premiums from them without any problems what would be a higher risk for them would be teenagers who drive maybe too fast and get involved in accidents or young mothers who are distracted by children and get involved in accidents so they would be high risk to the insurance company and so their goal therefore is to reduce the risk by taking on less riskier clients and to increase their premiums by taking on low risk clients in the same way we do not want high-risk trades we want low-risk trades that have a high probability of a payout in this way we collect more money on our winning trades than our losing trades so just like the insurance company we are in the business of risk and we therefore must embrace risk and uncertainty so when there's a major event like a Bitcoin forking and we see there's a huge uncertainty we can see that the market is incredibly quiet but when it's quiet that is a good time to be buying and selling because we know after the calm becomes the storm and as we saw Bitcoin rocketed up now as you saw I predicted this in advance because I was prepared for a move prior to the event having traded for many years I know when there's huge uncertainty and when there's quiet in the markets the market is coiling ready to spring into action and all we need to do is to predict which way it's gonna go whether it's gonna go up or down now I've shown you from previous videos how to evaluate structure and position in the market and from that we can determine which way is going to go but the long and short of it all is when we have a risky situation like a fork and uncertainty and other people want to stay out the market this is the time when we want to be in the market collecting our position in preparation for a big move and as we saw with the Bitcoin rise over the last few days we can make money from this move so therefore in summing up you need to embrace risk you need to embrace uncertainty because as traders we are in the business of risk and we are in the business of uncertainty just as the insurance company is but we are not gamblers we take on controlled measured risk just like an insurance company the insurance company survives year after year because they measure their risk in the same way if we measure our risk and control it we can survive year after year after year and just like me after trading ten years you can be ten years down the line with some serious profits under your belt having managed your risk and uncertainty now there you have it this is the video for today I hope you understand that as traders we are risk takers and we are in the business of risk and therefore what we need to do is calculate our risk which are not covered in this video and when we've calculated our risk we can get high rewards so thank you for listening I hope you've learned something today bye-bye now and take care you