Commitment and risk management

The key to risk management is commitment. Commitment ot a course of action before an event occurs. This is the only way that you can be sure that you will follow a strategy that may be painful, but for your own good. A stop-loss commits to a loss, but may limit what the ultimate lose may be. Stop-loss rules are a key form of commitment to offset the human tendency not to follow through on what may be painful but for our own good.