
In the novel “Little Dorrit” Charles Dickens wrote about the phenomena of the “Speculator’s Guilt”. This is when investors are so confident in an investment that they put all they have into that one, single investment. In the novel those who have invested in this way end up losing all that they had. The “Speculator’s Guilt” was a big problem in the 19th Century as it is today.
One of the great things about trading is that we can have access to many different markets. Opportunities are around every corner, so traders should make sure that they never overleverage on any one single trade. Is a trade keeping you up at night? Is it impacting your mood? If it is then you are most likely overexposed and overleveraged. A simple rule to live by is this – never, and under any circumstances, overleverage. The risks are too high. You will also most likely miss out on the opportunities of tomorrow by risking too much today. Good traders manage their risk.