That's only partly true Dante. Return is definitely not a known...

That's only partly true Dante.

Return is definitely not a known variable. Risk on the other hand is in part known.

The first aspect of risk is how much can the price of a stock go down after I enter it. Of course this, like the question of how much can it go up, is unknown.

However there is another aspect of risk that can be totally defined and totally in control of the investor/trader before entering a position - and that aspect is how much risk is the investor/trader willing to take on (i.e. how much are you prepared to lose) when entering a position. A rational investor/trader will determine this amount before entering a position and size the position and stoploss distance accordingly. Those then are known factors that are totally in the investor's/trader's control at the time of deciding to enter a position.

Cheers, Sharks