Risk Management: A Slow Walk on a Tight Rope …

We point out the primary riddle of risk management, which is that the life of a risk manager is very similar to someone doing a slow walk on a tight rope. We provide a set of directives, the five pillars risk mitigation guidelines, aimed at brevity so that it is readily apparent what actions to perform, and implement, without much confusion. The guidelines provided are based on our experience on trading desks across many different asset classes, and they are particularly applicable for the burgeoning field of crypto risk management. It is generally a troubling scenario wherein someone tries to manage something that they do not fully understand. Risk, as we know it, requires a lot more in-depth studies to be performed before we are in a position to more fully appreciate the etiology of risk. Once that starts to happen, we will be in a better place to try and manage risk more thoroughly. Our present attempts are better referred to as risk mitigation.