Tuesday, March 15, 2011

Thoughts on Asymmetrical Risk - March 15, 2010

Interesting article from BKForex on- "Asymmetical Risk"

Though I don't completely agree with his subway metaphor ...

I would  leave before hand in advance and take the 1 train. I've been an experienced commuter from the Bronx to NYC for a number of years and was able to get on all a points and meetings via local or express with wait times of 45 minutes to over an hour.

I guess that can translate into improving market time and leave room for margins of error.

However, at times even that is not enough as the article points out. And the longer I trade the more I would agree with getting approximate targets. So many times I have seen my targets reach within  a few cents or pips only to have the trend completely reverse. Of course this style of approximate targeting should only apply to short term trades. Each scenario will be different but there should be signs of reversals to help in ones decision.

If one were targeting much longer trends short term noise will have to be taken into consideration with taking on much more risk. Though once in reasonable territory longer out, I guess approximate targeting could also apply.


Alexander Lê
Managing Partner
Analyze Capital LLC

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