If a 3 percent draw down knocks you out of the game, you’ve got 33 times more leverage than equity, which means you’re way too leveraged. From Quoth the Raven at quoththeraven.substack.com:
“From time to time, everybody goes bust” – Joey Knish
Browsing social media last night and this morning, I was greeted with dozens of examples of people posting their “loss porn,” as the Reddit traders would call it, with one P/L after another showing huge losses.
Some traders posted ominous things about blowing up their crypto accounts, forced liquidations, and massive losses. Some even also posted, insinuating they were considering self-harm. Posts like these are everywhere:
As are ones like these:
Let’s assume half of these posts are people joking around, and the other half are dead serious. That would be alarming.
And so, this weekend is a good time to remember a couple important lessons.
First is the fact that things can change any day in the market without notice—as I have been saying for years and explained in my comprehensive wrap-up yesterday after the market closed.
Moshe Trumpstein (MIGA) has went bankrupt multiple times.
It’s not the end.