Should I cut position size on Monday?

macintash · May 22, 2012

Quote from TD80:

My (probably worthless) opinion is: Become obsessed with understanding what might break this edge you've found, how to detect it is breaking, and when (not if) it breaks (even if just temporarily), what is going to happen to you at X size when it breaks in a catastrophic way.

Then position/operate according to the principle of last man standing rather than best risk/return metric. Or you can go right out on the bleeding edge of optimal F and take the opposite side of my opinion..to each his own.
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Your advice is good. I have stop loss to exit all positions if strategy drops 10%.

macintash · May 22, 2012

Quote from AK100:

Too true.

Also long-short strategies are never neutral, nor are they ever hedged. Sure, a long-short trade has generally taken the directional risk out of the market but you've swapped that risk for the risk or 2 shares moving against each other, and that risk can be very large as many have found out over the years.

Long-short strategies can also offer false security in that because there's little risk taken on the outright market the player thinks his strategies are generally safe and low risk. Most of the time they are just that, until they're not....
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Short/long was only an example how you can have a strategy that's market neutral. My strategy is very different then long/short.

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Should I cut position size on Monday?

macintash

macintash