Are You Trading for Thrills or Returns?

Want to be on the show? Send us a question, a voice note or a quick video to [email protected] How much risk can you genuinely afford to take and how much loss can you emotionally tolerate? In Episode 13 of Markets and Mindsets, the team is joined by Jimmy, an investor with around a decade of experience who is beginning to explore more active trading, technical analysis and a more structured approach to the markets. Jimmy shares his enjoyment of gambling and risk-taking, and asks how to preserve the fun of trading without getting carried away. The conversation explores the difference between risk capacity and risk tolerance, why a widely quoted percentage is not automatically the right target, and how position sizing should reflect both your wider finances and your emotional response to loss. The team also examines the difference between trading for recreation and trading for return, why being right can feel as rewarding as making money, and how community, transparency and a supportive process can turn short-term excitement into more sustainable motivation. In this episode: - Why understanding risk is essential to both trading success and enjoyment - How life stage, liquidity needs and the cost of living can affect risk decisions - The difference between risk capacity and risk tolerance - Why a commonly quoted 2% risk limit is a ceiling rather than a target - How to translate percentages into a real monetary loss you can understand - Why trading for recreation requires a different mindset from trading for return - How limiting account funding and position size can keep recreational trading controlled - Why return-focused trading requires a repeatable process and careful review - Why the consequences of a loss matter more than the number alone - Why stepping away is the right choice when trading stops feeling sustainable Chapters 00:00 – Introduction: Knowing Your Risk 01:20 – Meet Jimmy: Investing, Trading and Risk-Taking 02:11 – Gambling, Enjoyment and the Appeal of Risk 04:18 – Risk Capacity and Risk Tolerance 05:30 – Why 2% Is Not a Target 06:20 – What Are You Optimising For? 07:13 – Recreational Trading vs Return-Focused Trading 10:51 – Why Position Size Shapes the Emotional Response 12:31 – Thinking About the Consequences of a Loss 19:10 – When to Step Away Enjoyed the episode? Subscribe to Markets and Mindsets for more conversations exploring the psychology behind better investing. If you enjoyed this episode, leave a rating or share it with someone looking to become a more thoughtful investor. Capital at risk. The value of investments can go down as well as up, and you may get back less than you originally invested. This podcast is for educational purposes only and should not be considered investment advice.