trendfollowing's Commentaries
Risk Management Article from Jason Pearce
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As a long-time professional in the futures industry, I was greatly impressed by both of your books and the wealth of information on your site. Job well done! I have recommended your materials to our clients. In August of 2008, we published a white paper to send to our clients. At the time, markets seemed to be breaking out to new all-time highs every week. We are a commodity brokerage firm and we noticed that many of our traders/clients, drunk on a lethal combination of adrenaline and large paper profits, were leveraging up to their eyeballs and disregarding the risks they were assuming. It was very much like the tech stock bubble of the late 90s! So we decided to write a little article on risk management (Read PDF). It proved timely as it coincided with the reversal of the commodity bubble, although the principles of risk management are universal truths that apply regardless of market conditions. I hope you enjoy a copy of our ‘white paper’. The bottom line is this: always take you trades based on the probable, but manage the risk based on the possible!
Regards,
Jason Pearce
Managing Director
Pearce Financial, LLC
Tags: feedback | risk-management
