The 24-hour rule: do you wait a day before big decisions?
After a big loss or win, the 24-hour rule postpones consequential decisions — depositing more, doubling size, quitting — until the emotion settles. Simple, old and effective.
Do you use it?
- the decisions you defer by a day
- the disaster the rule prevented
- where the rule doesn't work
The drawdown guide argues for exactly this kind of delay.
Background: Drawdown and recovery: why a 50% loss needs a 100% gain
Losses and gains aren't symmetrical. See how much you need to recover from a drawdown, what losing streaks do at different risk levels and how to set limits.
How much do you need to gain to recover from a 50% loss?
100%. The gain needed is the loss divided by one minus the loss, so larger drawdowns need disproportionately larger gains.
What is maximum drawdown?
The largest fall in account value from a peak to a later low, before a new peak is reached, usually expressed as a percentage.
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