You need this talk — because greed causes people to do funny things. At the end of this blog is a mea culpa of the owner of OptionSellers, who just got blown the fuck out and turned into dust. I’m indifferent about his experience because he’s old and should’ve known better. Blow ups are for younger men, creatures of finance with chemical imbalances and small dick syndrome. If you’ve been doing this long enough, minimum of 10 years, you know blow ups happen all the time, even to the so called ‘smartest fuckers in the room.’
Once upon a time, 18 years ago, I had a blow up. Back then I was untrained and in my early 20s and literally didn’t know what the fuck to do once the party ended.
Let’s make a few things clear now.
The recent trends are lower. Ergo, your short term bias should be for lower prices. Given the fact stocks, over time, almost always go higher, you should temper any bearish positions and implement some 2nd and 3rd order thinking.
What the fuck do I speak of?
Stress test your portfolio. Dissect it and build worst case scenario models.
What are your position sizes? Greater than 10-15%? You’re an idiot. Is your entire account being traded? You’re an idiot. Is your long term account being tended to, reassessed to conform with the times? If not, you’re an idiot. Are you diversified? How do you know and what is your benchmark? Is your trading account using margin? Are you using stops losses to contain losses? Are you trading just for the sake of trading?
The present tape is really hard. It’s a non-stop ball game with Nolan Ryan on the mound, spitting out 105mph peas. Why not wait for a new pitcher?
Eventually, the market trends will improve and easy money could be made again. Chill the fuck out and quit churning yourselves into oblivion.
Look at this asshole below now, crying and shit because he sold naked calls against natural gas and got himself and his ‘family’ members eradicated from the field. When you get a six sigma event — your models mean nothing. If you have a strategy that has outlier risk and could blow up during a black swan event, simply avoid said schemes and focus your efforts on compounding returns over the next 30 years.If you enjoy the content at iBankCoin, please follow us on Twitter