Traders cannot predict disasters, but they can avoid standing on landmines.
The so-called respect for the market is not about analyzing institutions or guessing the routes of major players, but honestly acknowledging that there are many market movements you just don’t understand.
A crash like $OM dropping 80% is not an exception, and it will continue to happen in the future. No one knows when they will blow up,
but traders can do one thing in advance: manage risks.
So at the very least, if you don’t understand it, don’t touch it, and if you do, you must set a stop-loss.
Don’t wait until it’s worth zero to remember what “risk management” is all about.
