Position sizing, risk-reward ratios, drawdown management and long-term capital preservation.
The trade is working. Structure held, the trend is extending, and you have an unrealised 2R sitting on the screen. The obvious thought arrives: I should have been bigger. The next thought is the dangerous one: I can be bigger…
Trader’s Library · Book Review The Black Swan by Nassim N. Taleb Explore all 80 books in the Trader’s Library → Some books teach you a strategy. The Black Swan teaches you why most strategies eventually break, and why the…
You risk 1% per trade. Every position is sized from its stop distance, every stop sits at structure, every rule is honoured. Then a Tuesday arrives where seven positions are open at once, correlated news hits, and the account is…
Every version of the Turtle story is told from Richard Dennis’s side. He made the bet, he placed the advertisement, he taught the system, and he was proved right. William Eckhardt is the footnote. The man who said it could…
Trader’s Library · Book Review The Intelligent Investor by Benjamin Graham Explore all 80 books in the Trader’s Library → Here is the honest tension at the heart of reviewing this book on a trading site: Benjamin Graham would not…
Ask a struggling trader for their win rate and they will usually know it. Ask for their average win and average loss in R, and the room goes quiet. That silence is expensive, because a win rate on its own…
Trader’s Library · Head to Head Van Tharp vs Alexander Elder on Position Sizing Trade Your Way to Financial Freedom against The New Trading for a Living Trade Your Way to Financial Freedom Van K. Tharp · 1998 · 9.0/10…
SNAPSHOT · 4 AUGUST 2026 SpaceX reported its first quarterly results as a public company after the US close on Tuesday. Revenue of $7.81 billion beat consensus near $6.9 billion. Adjusted EBITDA of $3.5 billion beat $2.0 billion. The net…
Risk is a roulette wheel. You do not know where the ball lands, but you know the wheel: thirty-seven pockets, one zero, and a house edge you can compute to four decimal places. The outcome is unknown. The distribution is…
Sharpe needs a standard deviation and a risk-free rate. Sortino needs a target return and a denominator most software computes incorrectly. Calmar needs a high-water mark and three years of history. The gain-to-pain ratio needs addition. Jack Schwager popularised it…
Every backtest report you have ever opened leads with profit factor. Every EA vendor quotes it. Every strategy marketplace sorts on it. It is the single most visible number in retail trading software. It is also the easiest number in…
Sharpe and Sortino both measure the same abstract thing: the wobble in your return series. Neither measures the number that actually ends trading careers. Nobody quits because their standard deviation was elevated. They quit because they were down 42% from…
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