STAR TRADERS💝

Surviving Bull and Bear Markets -
by Stan Whine-stein

Trading and profiting is all good, but I’ve come to understand (after a lot of pain) that the main aspect of the market is Survival!

Read any legendary trader and their top rules are all about survival.
1. Stops: Control your losses so you can live to fight another day.
2. Capital Protection: So you survive till the next bull market with enough cash
3. Keep the equity curve up to keep playing the game.
4. Avoiding foul companies: Use fundamental filters, charts, etc to do what? Protect yourself!! To SURVIVE!

But this is all about only one aspect: Trading.
The reality is that there are many more aspects to this survival.

And today I will be covering only one of them: Asset Allocation.

Many traders believe that keeping everything or almost everything in equity is the only way to go. We are traders after all, if we don’t keep everything in equity then who will?

My approach is not about maximizing gains, my approach is all about surviving.

I always remind myself that even a great like Jesse Livermore bankrupted himself twice. (Not to mention that he shot himself in the end)

And in order to survive I need capital for two reasons: To trade and to live.

Here is my simple logic: If my cumulative monthly interest income can help me survive comfortably then it gives me the psychological advantage that helps me avoid Overtrading, FOMO, YOLO, and any other acronym you can think of.

Allocation:
50% capital is in interest bearing instruments
50% in equity

Scenarios:
1. Bull run that doubles my capital: My net-worth increases by 50%. I’m happy.
2. Bear market: Money earns interest. I survive.

The key point:
Interest on 100% of my total capital = Generating 1% on my trading capital.

This simple yet profound approach is what has kept me alive. Because I can live to fight another day if I can generate just 1% per month.

Hope this helps. Happy Surviving!

#Copiedfromtwitter
#Dayendtrader

www.tgoop.com/startrader/11917

396 viewsedited  Jun 5 at 14:51

Surviving Bull and Bear Markets -
by Stan Whine-stein

Trading and profiting is all good, but I’ve come to understand (after a lot of pain) that the main aspect of the market is Survival!

Read any legendary trader and their top rules are all about survival.
1. Stops: Control your losses so you can live to fight another day.
2. Capital Protection: So you survive till the next bull market with enough cash
3. Keep the equity curve up to keep playing the game.
4. Avoiding foul companies: Use fundamental filters, charts, etc to do what? Protect yourself!! To SURVIVE!

But this is all about only one aspect: Trading.
The reality is that there are many more aspects to this survival.

And today I will be covering only one of them: Asset Allocation.

Many traders believe that keeping everything or almost everything in equity is the only way to go. We are traders after all, if we don’t keep everything in equity then who will?

My approach is not about maximizing gains, my approach is all about surviving.

I always remind myself that even a great like Jesse Livermore bankrupted himself twice. (Not to mention that he shot himself in the end)

And in order to survive I need capital for two reasons: To trade and to live.

Here is my simple logic: If my cumulative monthly interest income can help me survive comfortably then it gives me the psychological advantage that helps me avoid Overtrading, FOMO, YOLO, and any other acronym you can think of.

Allocation:
50% capital is in interest bearing instruments
50% in equity

Scenarios:
1. Bull run that doubles my capital: My net-worth increases by 50%. I’m happy.
2. Bear market: Money earns interest. I survive.

The key point:
Interest on 100% of my total capital = Generating 1% on my trading capital.

This simple yet profound approach is what has kept me alive. Because I can live to fight another day if I can generate just 1% per month.

Hope this helps. Happy Surviving!

#Copiedfromtwitter
#Dayendtrader

BY STAR TRADERS💝