Thanks Dave, I would have to say that I agree completely with your whole post except bad luck trumping all. Maybe I am a fool, but I do not believe in blaming or crediting luck for things that happen. If you take prudent risks, rarely will one bad event blow everything up.
Most people that get blown out in business ventures can be found to have been taking too much risk after the fact. I think “luck” is just part of the random chaos type of pattern that occurs in studying distributions of outcomes over time. Essentially, those events are the fringes on the bell curve. Although low in probability, they are not zero in probability. Therefore, it cannot be planned in our risk-reward plan to associate a zero probability to that outcome. If one does that, and the “unlucky” or 1% likely scenario occurs, and one is blown out of his business because of that, it is poor planning, not bad luck.
As a trader I have this in mind with every single trade that I make. It is why my trading business will never be “carried out” over bad luck. It could fail, but bad luck would not be the reason, because that is planned for via stops, etc..
