william the wie
Gold Member
- Nov 18, 2009
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How do people outsmart themselves in the markets to think anything else is the endgame?.
Rule two losses hurt much more than gains help.
In the modern market you can usually find an effective hedge at a price that will not prevent profit. If you can't find a hedge why are you even thinking of putting your money in that position?
Financial leverage amplifies this effect so only use structural leverage such as options to reduce risk. And do keep in mind that without a hedge no position is safe enough.
Just putting out this thread because a lot of the posts I'm reading lately one or both of these rules are being ignored in the China meltdown.
Rule two losses hurt much more than gains help.
In the modern market you can usually find an effective hedge at a price that will not prevent profit. If you can't find a hedge why are you even thinking of putting your money in that position?
Financial leverage amplifies this effect so only use structural leverage such as options to reduce risk. And do keep in mind that without a hedge no position is safe enough.
Just putting out this thread because a lot of the posts I'm reading lately one or both of these rules are being ignored in the China meltdown.