We love losing –100% 🖤 | Tackle Trading
≈ That’s the beauty of the financial markets. ≈
“The most terrifying fact about the universe is not that it is hostile but that it is indifferent; but if we can come to terms with this indifference and accept the challenges of life within the boundaries of death […] our existence as a species can have genuine meaning and fulfillment. However vast the darkness, we must supply our own light.”
Stanley Kubrick for Playboy Magazine (September 1968) —
How successful traders and investors are born? This is the million-dollar question we are humbly trying to answer with the 3-part series “The Holy Trinity of Trading”, published in the Trading Justice newsletter.
The first step in becoming successful is mastering Portfolio Design — covered in the February edition. The second step is mastering Position Sizing (Money Management).
Above all, Position Sizing is an exercise of humility.
- We don’t move the markets, we follow them.
- They are indifferent to us and can be very hostile.
- They are not simple, but utterly complex.
- We don’t know the future.
- Uncertainty lurks.
- Fat tail events await.
To some extent, we must love the fact that we can only lose –100% and acknowledge that Position Sizing will be there for us when all else fails.
This is what the March edition of the Trading Justice newsletter is all about. This month, we are taking you for a ride in the unfathomable universe of Money Management. A universe where the most you can lose is –100%.
Chart of the Day: The Boeing Company
In the March edition of the Trading Justice newsletter, we talk about Creatures from the Abyss & Meteorites from the sky. We can’t predict when they are coming for us, but they are, inevitably. A deadly crash in Ethiopia last Sunday killed 157 people. From its highs on March 1st to the bottom yesterday (March 11th), Boeing shares experienced a –18% drop. Only position sizing will be there for us when all else fails.
Video of the day: Pre-Defining Risk
Coach Noah Davidson explains the importance of defining risk before placing any orders, even more during high volatile markets.
Originally published at tackletrading.com on March 12, 2019.
