What do you do when you take a big hit in the markets?

[inmate451]

You both trade differently. Size, risk, and opportunity stands to be the margin. Big time pair trades will at somepoint blow you out. I've had best friends clear 7 figures that ended up working back at some chop house as a clerk or brokering, scraping by barely surviving. Not to say it will happen to you but it will eventually, hope you work in a single story building or have ample medication for the inevitable. It will work till it doesn't, and risk in my opinion is totally out of control. The real money was pair trading internet techs in the boom, the sunburnt limey was a pair trader that went home to Europe broke too. Good luck, hope you can make go, what I couldn't. I'm rambling now.
D

 

[freealways]

A big loss is different in dollars for different people.

No-one has as yet really raised the reason for a big loss.

Some of the reasons are :

1. breaking one's money management rules i.e. having too large a position

2. an unexpected and unforseeable collapse kin a trade

The first reason is bad news. I know a big trader, who, the moment he becomes aware that he has gone on a rampage by breaking a management rule, closes all his trades and penalises himself by not trading for say a week. That makes, to me at least, good sense.

The second reason for a big loss is really beyond one's control and responsibility and, if one is really shaken up, a short break cannot do any harm either.

freealways