Let's say one day an eccentric billionaire comes to you with the following mind-game (and backs it up with a suitcase full of cash): He'll give you double or nothing on the roll of a single die. If it comes up a 'six' you lose the entire amount wagered. If it comes up one through five, you win double your money. In this hypothetical situation, your current net worth is first adjusted to exactly $500,000, and you have no choice on that matter even if this would be an adjustment in the wrong direction in your case.
You won't be cheated- the game is not rigged in any way. Another thing is that your insane potential benefactor has put aside millions in trust/escrow so that you will have the opportunity to play this one in six game, once a year, every year, for the rest of your life.
<b>Question: How much of your net worth do you risk this time/this year?</b>
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This question came up in a discussion between traders on how much to push into the pot when you finally find that special once-a-year market scenario where you get that maximum-conviction, 'perfect setup' type of trading opportunity. So it's not all that hypothetical after all...
You won't be cheated- the game is not rigged in any way. Another thing is that your insane potential benefactor has put aside millions in trust/escrow so that you will have the opportunity to play this one in six game, once a year, every year, for the rest of your life.
<b>Question: How much of your net worth do you risk this time/this year?</b>
-----
This question came up in a discussion between traders on how much to push into the pot when you finally find that special once-a-year market scenario where you get that maximum-conviction, 'perfect setup' type of trading opportunity. So it's not all that hypothetical after all...