Risk Management
R-multiples, drawdown budgets, and correlation — the machinery that keeps an account alive.
LOSS FEELS FINEROUND-NUMBER STOPSTEALTH LEVERAGE
NO LONGER TRUESIZE TO THE LOCATIONSKIP IF UNAFFORDABLE
Stops as Invalidation, Not Pain
A stop is the price at which the idea is no longer the idea. Placing it where the loss ‘feels fine’ is how you donate extra R to a dead thesis.
ONE SENTENCE
SAME DOLLAR MOVE
RISK-ON RHYME
HAIRCUT COMBINED R
BOOK NOT TICKET
Hidden Correlation in a Small Book
Three tickets can be one bet if they all lean on the same dollar move or the same risk-on impulse. Count exposures, not just the number of charts.
HOPE AS A SYSTEMREPAIR TRADESRAIL AS SUGGESTION
SPENDING CAPDAILY AND WEEKLYSHUTDOWN ON TRIP
Drawdown Is a Budget, Not a Mood
A loss limit is a spending cap for being wrong. Treat it like rent: paid on schedule, not negotiated when you are already behind.
PLANNED LOSS AT INVALIDATION+2R NOT A HEADLINELOCK R AT ENTRY
R as the Unit of Account
Dollars flatter or frighten depending on account size. Measuring wins and losses in R keeps the review honest and the size conversation separate from the ego conversation.