Accept the Risk When Trend Following
When people put on a trade most believe it has to work. This is not trading with a plan. It is imperative to accept the risk when trend following. Accepting the Risk means knowing that the trade does not have to work and even further more any trade is 50/50 & that you can & will loss money. I have internalized this over the years and when I put on a trade I think to myself ” How much is this going to cost me to see if it will work?” I am VERY RISK adverse and put on low risk trades with most risking less than 1% of my trading account on that particular methodology. Thinking in terms like this I really think is rare. It really took me a long time to finally get to this point.
I have spoken to countless commodity trading advisors that think through their superior knowledge the trade has to work. I would never invest with commodity trading advisers like this. When a trade is put on I have accepted the risk that I will lose a very small percentage of my account to see if the trade will work. I can do this many times over and not be hurt financially. Eventually I end up catching a nice move which makes up for all the other trades that I lost on. Simple and ingrained in my psyche.
When I allocate to commodity trading advisors I want them to think in the same basic way I think. That they are humble and as paranoid as I am. They know that the markets can compound their net worth and at the same time destroy them financially if they do not follow their exact plan. If you want to compound your way to wealth, have a plan, have discipline and Accept the Risk When Trend Following.
Futures trading involves risk. People can and do lose money