Old A’s rented apartment was only twelve square meters, but it had two monitors, a camp bed, and a wall covered in sticky notes. I crouched on the floor and looked at them. They were all numbers: 0.5%, 1%, 2%… The biggest one said: No single-trade loss should exceed 1% of your total capital.
“What’s this?” I asked.
“Rules.” Old A set his coffee on the table and pointed to his head. “I got liquidated three times. The first two times, I thought I was just unlucky. It wasn’t until the third time that I understood—it wasn’t the market that killed me. I was the one who stuck my neck out.”
He opened his trading software and showed me his positions: total capital A8, with each position size always kept below 2% of his total capital. His stop-loss line was set firmly in place, as if carved into the screen with a knife.