i understand that. I’ve used QID (QQQ X 2 inverse) for very short term inverse and I’ve used PSQ for longer holds (no leverage so no drift from compounding)
That's not how math works. If you lose 8% of your initial deposit on the first day, you do not lose 8% of 10K every day. This is why people on the other side of the equation do not understand how compounding works.
use my example to explain that. I used my example to point out that smallfil was misunderstanding the 8% factor
That is right. I do mean losing 8% on 7 different stocks, 7 different positions. Take this current stockmarket, if it suddenly, say drops 50%, you could easily lose 8% x 7 = 56%. Of course, you could lose more on some positions and lose less on other positions. It is also, possible, you could lose more than 56%. Stop losses will not protect you when a stock gaps down. It becomes a market order executed at the next available price.
You are assuming my that the entire amount is invested across the 8 stocks. And you make a good point. But that won’t happen, in this kind of market I’ll always have a lot of cash and a few positions on at most, at any time. I don’t intend to trade as much as I hsve been, for now
No, that was the example of the other poster. I was merely, pointing out that if you risk 8% x 7 stocks (assuming you have 7 trades), you are risking 56% of your account total. He said it was okay to risk 8% and take more positions. I think that is very bad advice. They have already done the math part of the risk of ruin and that is not to risk more than 2% per trade. Again, it is the math experts who have done the study not me. I am merely sharing valuable information with you and others.