If we look at volume and price trends over the last few years, we can see the market’s shift to more of volatility that’s less concentrated.
If it takes a relatively short period to gain access to one of the top tiers of the market, do we look back?
Do we try again?
Are we simply too good of a trader?
If I trade with money (which is the entire market) and it doesn’t pay off, that’s a good thing!
We can create an opportunity.
If my money isn’t able to be used to get me an extremely high price, I will lose money. And if I do get a premium or better than what I expected (even if I have no idea) I will win!
There’s an opportunity in being able to be more risk averse. There’s an opportunity in being willing to be patient in waiting and looking for opportunities. There’s an opportunity in being willing to listen to those who are knowledgeable that aren’t necessarily in high demand. This is what allows most traders to be successful.
If you want to make a lot of money that’s the way to go, but it will take some discipline.
The risk is greater, but I don’t believe that you can achieve anything without going through the hard work and learning to be patient.
So where do you look for risk with your portfolio?
Here’s my most recent example: a year ago I was a long/short/bear in a market that was extremely strong. I was able to earn a large amount of money, but it’s still painful to go through it again. I believe that my ability to be patient and wait for better opportunities will be invaluable in helping me learn to be risk averse again:
Look for opportunities that are “less volatile” than most. You don’t want to be short on an opportunity because it costs less than the price, but if you are short on an opportunity that is “more volatile”, you lose. If you’re a long/short/bear in a market that’s highly volatile, wait. For example, I am a long/short/bear in the SPDR S&P 500 (SPY). There was one opportunity I had a few years ago, which was an opportunity to get extremely high prices and earn more than I did. That was a big moment in my life. While it was painful, it was also an opportunity I had. I can