Risk Manager, Kodak, Ammo. discussed on Chat With Traders
Someone has sent in a question here, which I think is quite interesting would love to hear how the firm traded big hot stocks like cardiac how do you manage risk with these massive spikes and stock halts Max Day losses sticking trading rules managing emotion, etc.. A lot of these symbols are just really wild As a traitor, you look forward to these types of symbols you like. Kodak and go from twenty to sixty. In one day you have sti the other day we had the stock. Oh from a dollar forty. And then back to fifteen I think in the same day. How do you manage risk as intraday traders? Just incredible. So as as Traders we love you want the volatility and we can't wait for simple to to move like that. But now when you wearing your risk manager hat on and you're monitoring traders and you want to make sure that nobody blows up you WANNA make sure that everybody's. You know in in a good spot to try to capitalize on it rather than get hurt then it's gotta approach little bit differently One of the takeaway videos we did recently was about P I, and I had to call a meeting. S P I and you mentioned Kodak but it's the same idea SPF. Midday, we call the meeting we all jumping zoom call and ask guys what the F. We doing here. Everybody's trading frontside. Everybody's so convinced that the stock is going down the all the stocks eighteen or fifteen or whatever was and everybody you look at my screen and everybody's shorts and it's like it's a nightmare as a risk manager because like well, how many times does each train going to try this thing? Before they realize. Okay, maybe it's not going down and it really starts to add up. So. On our part is it's really important to to monitor the symbols and to be in touch with the traders throughout the day. Just make sure. Hey, make sure you we waiting for your setup. Don't just be emotionally because you know it's going down. Make sure you have a reason to be in preferably wait for the backside because once the backside is in it. That's going to be easier, but then you look at us. And distinct kept halting left and right went from twenty to thirty to forty and end from forty. I think it opened down twenty five. it was just incredible it's very hard to manage risk Delhi so. A lot of traitors just end up leaving it alone. Insane. I'm I'm GonNa wait I'm going to wait for this thing I don't care if it goes from forty to twenty five without me. But maybe. It goes to twenty-five. It gives me a trade where I can try to make five ten fifteen dollars under way down. So it's really hard. How do we manage it position sizing? Just. Constantly being in touch with the traders making sure that they're third straight emotionally, not just in and out for the sake of being in an. Really, wait for for the best setups in it because if you if you're. If you run out of AMMO. then. You're not going to be able to hit it opportunity looks great. But if you're out of AMMO A lot of times, you're not gonna be able to hit it again. So It's important to to size down and we. have no interest in trading those days in those symbols because it's just too difficult. So when you have these like extrordinary situations like this. Do you increase the amount of risk that you're giving yourself on that day a little bit more flexible in that regard or is it still just the same as any other day? So each trader has a lockout and we call that a speed bump. once hit a certain Max loss they. LOCKED OUT OF TRADING At that point they have to chat with your manager or with me or with my? and. Explain why they WANNA be unlocked right so if if it seems that the traders Is. Not. untilt. Seems like the trailer is. Just. Hate a few bad trades happens sometimes get streak of trays a homework. There's still opportunity there trade thinking clearly than we give them an locking and he can keep going to get some more risk But if we see that it's the trader is not. Put on. The best till now is trading emotionally is afraid of missing out on the trade constantly just kidding back in after closing trade. These are things that we don't like, and they probably won't get locked day now to come back another day. I think this question Tarzan.