How do you view your trading downside?
“Most traders, being trend followers, get hurt whenever a [market] reverses course. But downside is managed using several techniques: quick stop loses, maintenance of the bulk of assets in treasury bills, and adjusting leverage in opposition to prevalent market volatility. Jeremy O’Friel…emphasises the importance of constantly manipulating “gearing” (another term for leverage) as a means of maintaining a consistent level of risk as the economic environment changes.”