I can be locally concave,
Take trades with profit factors < 1
But I better be globally convex. How ?
By betting dynamic percentage,
Increasing % when cash is flowing in,
And decreasing % when cash is flowing out.
Also by setting up a daily risk limit,
In my case the daily kelly (Currently 7%)
And preferably an asymmetric profit target.
(Ideally)
To risk maximum x% per day,
To achieve at a minimum 2x% per day.
If I set a 4 to 1 daily reward to risk,
I can lose 4 days and break even on the fifth.
Also scaling in and out of a position,
That’s something to be learned.
To average down is fine,
If we don’t over bet the full unit.
It’s all about betting the correct size,
And not risking more than the bet’s worthiness.
To take “good” risks.
If you’re not Okay about losing this trade,
Then it’s a bad trade. Close it right now.
Hope is kinda greater than fear.
You likely overpaid for it.
When you bet the right size,
You don’t hope the gain while negative,
And you do not fear the loss while positive.
You just sit tight.
And let the market do its thing.
Don’t fight the trend. Least resistance.
A continuation is more likely than a reversion.
Reversions take time & efforts. It won’t turn on a dime.
I can have a view on the market,
But I shouldn’t beg the market to listen.
Don’t anticipate. Just adapt to the situation.
Look for similarities.
Experience is written on the chart.
Scroll back into history for analogies.
Always expect the worst case.
If you can’t accept it. Restructure the bet.
It’s only plausible reasoning.
More or less and the degree of plausibility.
Extract the most money,
From the best trade.
Think statistically,
Over multiple iteration ...
What action is worth doing ?
How can I optimize it for the money ?
Take trades with profit factors < 1
But I better be globally convex. How ?
By betting dynamic percentage,
Increasing % when cash is flowing in,
And decreasing % when cash is flowing out.
Also by setting up a daily risk limit,
In my case the daily kelly (Currently 7%)
And preferably an asymmetric profit target.
(Ideally)
To risk maximum x% per day,
To achieve at a minimum 2x% per day.
If I set a 4 to 1 daily reward to risk,
I can lose 4 days and break even on the fifth.
Also scaling in and out of a position,
That’s something to be learned.
To average down is fine,
If we don’t over bet the full unit.
It’s all about betting the correct size,
And not risking more than the bet’s worthiness.
To take “good” risks.
If you’re not Okay about losing this trade,
Then it’s a bad trade. Close it right now.
Hope is kinda greater than fear.
You likely overpaid for it.
When you bet the right size,
You don’t hope the gain while negative,
And you do not fear the loss while positive.
You just sit tight.
And let the market do its thing.
Don’t fight the trend. Least resistance.
A continuation is more likely than a reversion.
Reversions take time & efforts. It won’t turn on a dime.
I can have a view on the market,
But I shouldn’t beg the market to listen.
Don’t anticipate. Just adapt to the situation.
Look for similarities.
Experience is written on the chart.
Scroll back into history for analogies.
Always expect the worst case.
If you can’t accept it. Restructure the bet.
It’s only plausible reasoning.
More or less and the degree of plausibility.
Extract the most money,
From the best trade.
Think statistically,
Over multiple iteration ...
What action is worth doing ?
How can I optimize it for the money ?
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