Size the risk

Commit in proportion to your edge, and since your edge is a guess, commit less than it suggests, so that one bad outcome cannot ruin you.

Why it matters

Even good bets lose sometimes. Whoever stakes everything on one good chance is eventually wiped out by bad luck; whoever stakes a sensible share stays in the game long enough for the edge to pay. For a one-off, large decision the rule is simpler: never risk ruin.

The question to ask

If this goes wrong, can I recover, and is the stake worth the edge?

At work

Pilot the new product with one region or one customer group before you move the whole budget to it.

In study

Do not stake the whole grade on one ambitious project; keep the core work safe and take the risk where a miss costs little.

Lessons

Simplify when aheadWhen you are ahead and a sure win is what you need, remove the moving parts that could still go wrong.
Give a little, get moreGive up one thing only for more of another, and count both in the same units.

Shown and practised in poker: Which hands to play.

Use it in a work case, a short story of linked decisions: The rushed website, The café's coffee beans.

New to chess? The examples here use it. Play your first moves (five minutes), then learn chess from the beginning, one short lesson at a time.

New to poker? Play your first hands, with a coach at every decision. Practice points only.

Practise and review

Questions from every lesson above, in mixed order. You do not need to finish a lesson first.

Your level: Not started
In the games: Not started
Due for review: 0

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Review Size the risk questions

In the reference

Simplify when aheadWhen you are ahead, reduce the risk: trade pieces and head for a position where your advantage is easy to use.
Sunk costWhat you have already spent is gone. Decide on what happens next, not on what you put in.
Trade-offsMaterial, time and position can be exchanged for one another. Give one up only for more of another.