A small asset base is a strategy. A larger one is a business. How you handle yourself in market corrections instructs allocators how you will handle yourself with their money. It’s a tryout or an audition.
Pairs trading is a good way to have a hedge that you can actually make money on. Simultaneously long one name and short another. Both “legs” can profit, whereas if you have a married put with a long stock, you’re bullish on the stock but if you make on the hedge, it’s because you’re losing on the stock.
Conclusion
Have a game plan ahead of time. The market is always right – don’t deflect blame. Really good traders understand themselves very well. They have ownership of their drawdowns.
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