Setting Stop Loss Is False Risk Control In Extreme Volatile Market

Option trading for passive income?

Those "Guru" or Trainers who are earning trading courses are telling you that option trading for passive income. Have they told real person, real blow out and chopped fingers?


The term `picking up pennies in front of a steamroller' is linked to Nassim Taleb, an acclaimed author on randomness and risk, whose books describe an investment strategy that has a high probability to yield a small return (pennies), and a small probability of a very large loss (steamroller).

Read? Picking Up Nickels In Front Of A Steam Roller


Last night gathering of two veteran bloggers and two veteran ex bloggers in 2005/2006; we can say that we are the pioneers in this investment blogoshere in Sinagpore.

Real life example of picking up pennies in front of a steamroller'  and killed by steamroller.

Steamroller is slow mover and definitely we have more than sufficient time to pick up pennies and duck safely. Right?

One of them shared how he blew out from option trading and whatever theories and practices he knew are all thrown out!

Setting stop loss is workable and effective in an orderly market and you can get out safely at your stop loss; but in extreme volatile market; your stop loss is NOT REAL!

It can't never control your risk! You may blow out in just one trading day (night in Singapore)! Extreme gap up or gap down. You are gone! Your stop loss is useless!

He lost $160K in one night and giving back all he had earned and more! 

Now; he adopted retiree investing strategy of 80% bonds and 20% equities and focus on earning more to build up even larger capital base when he finally retires in his 50s from his full-time job.