Oh man, the first post is so wrong, hope no one is taking that advice. Isn't Edd Thorp a successfull trader? well, he said "master hedging and scale out of losses" advice that has let me not only survive black swans countless times but also allowd me to come out of the event with 6 figure profits. Same goes for the last part of the post... being convinced that the trade is good does not stop a tweet or black swan from making it go bad even temporarily but seriously enough to blow the account if a hedge or STOP wasn't in place.
The second post contradicts the first, can I then assume that you dont't know what hedging is?
An essential part of being a successful trader is to preserve capital, S/Ls don't always achieve this as many STOPS in a row can deplete capital, whereas hedging can keep a status quo even when markets turn against the positions. Ideed good trading requires the trader to be in the right direction most of the time, but even this, requires protection against temporary reversals... STOPS can often turn an otherwise good position into a loss, hedging can save the position untill the temporary reversal recovers.
Hedging does have a cost but using it can also give the trader >3,000 ROI compared to >200 ROI when using STOPS on the 1:3 principal. So, if you scalp then continue with the S/L strategy, but if you trade on fundamentals then hedging is the way to go... remain convicted to the fundamentals but take out insurance against sentiment swings, when sentiment goes against the fundamentals then, rather than STOP the positions, add to them, being hedged will allow you to do that and come out the other side with 6 fugure profits.
