Introduction Risk management sits at the very heart of successful trading and investing. No matter how sophisticated one’s analysis or how compelling a market thesis may appear, neglecting to manage risk effectively can spell disaster. Yet, time and again, traders overlook fundamental safeguards—such as stop-loss orders—and miscalculate position sizes, leaving them vulnerable to outsized losses that can wipe out months or even years of gains in a matter of hours or days. This article explores why risk management matters, illustrates the peril of ignoring it with a detailed sample scenario, and offers practical guidance to help traders protect their capital without sacrificing opportunity.

Abstract Market makers are vital players in modern financial markets, as they provide liquidity and ensure smoother trading operations. However, the asymmetry of information, capital, and technology between market makers and individual traders creates a significant imbalance, often to the disadvantage of the latter. This article explores the functions and strategies of market makers, the risks individual traders face, and how a robust risk management framework is essential for mitigating such dangers. Drawing on seminal works including Trading and Exchanges by Larry Harris, Market Wizards by Jack D. Schwager, Reminiscences of a Stock Operator by Edwin Lefèvre, and Trading for a Living by Alexander Elder, this article provides a comprehensive review of these dynamics and practical advice on protecting one’s investments.

The stock market is often described as an ever‐evolving ecosystem—one that has survived centuries of economic, political, and technological changes. Despite periodic downturns, recessions, and even crashes, the underlying institution of the exchange remains robust. This article explores the notion that the “market never dies,” outlines the historical roots and resilience of exchangeable markets, explains the cyclic nature of market “waves,” and provides actionable insights for traders to remain rational and seize opportunities when they appear.

Ralph Nelson Elliott introduced the idea that market prices move in repeated patterns, or waves, driven by the collective psychology of market participants. As Elliott famously argued, market movements are “a direct expression of the psychology of the masses.” This insight is particularly salient in our modern media landscape, where narratives proliferate rapidly and can influence investor behavior on a global scale. Historically, markets have always been vulnerable to the sway of media narratives, whether disseminated through traditional outlets like newspapers and television or through modern social platforms such as Twitter, Facebook, and Reddit. When these narratives converge with the natural oscillations of the Elliott Wave pattern—comprising impulse waves (driving the primary trend) and corrective waves (pulling back from extremes)—they can amplify market movements, leading to periods of exuberance or panic. In addition to analyzing the impact of media on wave formation, this article also focuses on risk management techniques. In volatile times influenced by potent media narratives, understanding and implementing measures such as stop-loss orders can be crucial to protecting capital and mitigating risk.