Sharing Taleb’s latest paper—using the DIRAC function for modeling, he critically analyzes how stop-losses impact trading systems. Contrary to popular belief, setting stop-losses doesn’t actually reduce risk. The math proves this is a major misconception. Risk never disappears; if you set a 10% stop-loss, the probability of a 10-100% loss gets concentrated right at that 10% stop point, making it the most fragile part of your system. This paper further highlights the importance of portfolio diversification. That’s what I’m focusing on now (used to be all-in YOLO with small capital). The essence of stop-loss is to trade a higher probability of a small loss to hedge against low-probability, large losses. But frequent stop-outs from small moves can grind away your capital and make you miss real trends—basically accumulating systemic risk. In your trading skill tree, make sure to unlock strategies for shorting volatility in ranges and longing volatility in trends. Every trader has three “candlesticks”: the market’s, your PnL’s, and your mindset’s. Diversifying positions and playing ranges help control PnL drawdowns and build positive mindset feedback loops (trust me, I missed out on a lot in life because I couldn’t manage my mindset candlestick). This way, it’s easier to play your A-game—and keep your life candlestick trending up at a 45-degree angle.

To judge the ability of a fund/trader, in addition to looking at the data, it is more important to analyze its core and assess the underlying systemic risks. From this perspective, 90% of people are unqualified.

I just want to be lazy and copy the answers, but every time I find out that the person who copied is also copying someone else's answer 🤣.

The ads can be generated by AI; there's no need to copy them.