The Trade Busters cover image

21 - Sequence Risk and Asymmetric Return Compounding

The Trade Busters

00:00

How to Trade Consistently

If you trade sizing consistently based on dollar amounts, if your account takes a deep drawdown, you will inadvertently be sizing up the trade as a proportion of your account. If I have $100 and I lose 20%, I'm down to 80, right? That $20 is now representative of 25% of my remaining $80 and thus the 25% required to get back to even. So that's an example where if you lose a percent, it takes more than that same percent to get back into even. And this gets exacerbated essentially if you take a large drawdown, right? The same $1 trade is 1.4%. You can't bet with a small $1 with a

Transcript
Play full episode

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!
App store bannerPlay store banner
Get the app