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Hello Mark,
what really matters is the mark to the market end of day risk. or if
your in bad enuff shape i'm sure your broker will be calling intraday.
overnight gap risk is not nearly as important as where it settles, or
just prior to close of that session 1. they don't keep books overnight
yet.
i would suggest ignoring all risk other than eod and i would not use
stops to trade with and i do not try and catch trends, or worry about
most all the common things discussed here which sound good but have no
practical application to making money.
portfolio diversification is a myth and nothing can be a substitute
for a precise trading method applied on a single market.
if it looks good its bad, and if it sounds good its bad, and if it sounds
logical its not, but if it quacks it is a duck.
MT> Based on the comment above aobut risk not being initial margin, how do you
MT> define risk? Yesterday Gitanshu talked about gap risk and extrodinary
MT> events making hard stops ineffective to define risk. Although i understand
MT> your point Gitanshu, extrodinary risk is just that, Extrodinary. Must we
MT> plan for the worst in all trades since it will only happen once in a great
MT> while, or shouldn't we use portfolio diversification to lessen the
MT> probability of catastrophic loss?
MT> These are just points of interest to get us back onto productive discourse.
MT> Mark
--
Best regards,
Mark Brown mailto:markbrown@xxxxxxxxxxxxx
Y = Offset + Amplitude * sin(Frequency * X)
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