Ep. 320: Mike Shell Interview with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
00:00
How to Control Your Downside Loss
The downside is actually the part that we can control the most because we can predefine our risk. And once I've accepted my risk, then I just let it rip. If on average I earn $2 when I win, then the payoff ultimately is a positive expectation. A dollar minus 50 cents is 50 cents. That's how we have to think in terms of probability and payoffs.
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