The document discusses the Tradeslide Stable Risk badge. It defines stable risk as a measure of how stable the risk of a trading strategy is over time, and whether risk fluctuates or remains consistent. It notes that stable risk does not necessarily mean low risk or high risk. The document provides information on how stable risk is calculated in Tradeslide and discusses why stable risk is an important consideration for traders and investors.

1. Rm Badge
www.tradeslide.com

2. TS STABLE RISK
1. WHAT IS IT?
2. WHAT’S THE POINT?
3. HOW TO PROGRESS?
4. QUESTIONS?
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3. TS Stable Risk– What is it?
A measure of how stable the risk of a strategy is
(Does the risk in the strategy change over time?)
1 The MOST IMPORTANT badge at the TS Challenge
2 Stable Risk = Predictable Risk ≠ Low Risk ≠ High Risk
3 A measure of fluctuations in risk in a strategy’s history
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4. TS Stable Risk – What drives it?
Impact Rationale
• Pro Risk Management means: • Volatility should stay as constant as
• For the last 12 TS Periods possible
• Risk fluctuation in last 3 • To compare trading strategies on
TS periods (day by day) is an apple to apples basis, TS Periods
TS Periods
less than 1 unit in the TS harmonize across
Risk master scale • Frequency of trades
• Length of trades (duration)
• Market volatility will have • Your role as an asset manager is to
shifted over the above 12 risk generate returns within your
periods investors’ risk appetite
Volatility
• Trading will need to account for
market volatility if investor
volatility is to stay constant
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5. TS STABLE RISK
1. WHAT IS IT?
2. WHAT’S THE POINT?
3. HOW TO PROGRESS?
4. QUESTIONS?
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6. Risk / return Tradeoff
Investors are human, and humans are risk-averse
Every investor comes with a personal &finite appetite for risk!
• The first question an investor will ask
• Is not: how much can I make?
• Is: how much could I LOSE??
• Stick to this risk target regardless of
• Whether you trade frequently or not
• Market volatility
• Assets you trade over time
• Every trader goes through losses
• Only bad traders can’t predict their worst loss
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7. All weather money management
Market volatility comes and goes…
Can you stick to a risk target when markets change?
When markets move… Your investors shouldn’t notice!
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8. TS STABLE RISK
1. WHAT IS IT?
2. WHAT’S THE POINT?
3. HOW TO PROGRESS?
4. QUESTIONS?
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9. Stable risk– How to progress?
Managing to target risk is not too hard…
ONCE you have a risk target!!
1 Sticking to a risk target – is MORE important than winning or losing
2 Simple tools can help you monitor your risk
3 It’s more about the commitment, than the difficulty
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10. Stable risk – TS tools to help you
Use the stable Risk Chart in TS
To monitor fluctuations in your existing history
Insertargráfico de
riesgoconstante de Javi
vs. gallinaloca
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11. Stable risk – TS tools to help you
You can also use the Leverage Management Badge
And the Leverage Management Chart
Insertargráfico de
Consistencia de
apalancamiento
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12. TS PERIOD
1. WHAT IS IT?
2. WHAT’S THE POINT?
3. GROWING YOUR TS PERIODS?
4. QUESTIONS?
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13. Where to go from here?
• You may want to also check
• TS period definition
• TS risk definition
• This article is a “stub” - Feel like you can improve it? – GREAT!
• Feel free to post your questions to the TS wiki – we’ll incorporate via improving its
content or on our FAQ
• Have suggestions? juan.colon@tradeslide.com can’t wait to hear them
• We’d love to credit you for improving it
• Contributing to the Q&A sections will boost your mentor score if others like what you post
(even questions do!) – helping out will reflect on your community standing
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15. Gráfico de martingala
antes de castaña
The sky is the limit?
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16. Gráfico de
martingalatrascastaña
Where did it all go wrong??
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17. Introducing… the martingale
An attractive illusion…
But keep your money AWAY from it!
• Looks promising!!
• Attractive returns
• Low initial risk
• Seemingly constant (but actually
random) risk profile
• But it’s TOXIC to investors
• When losses hit…
• Capital suddenly implodes
• With NO prior warning
• A very profitable ILLUSION
• Market making brokers PROFIT
• Martingalers’ profit via IB fees
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18. An appeal from Independent Traders’ nation
Martingales that burn investors…
Steal YOUR credibility as a trader
• Martingales undermine our collective
aspiration to manage investor capital
• An investor deceived by ILLUSION
• Will NEVER trust a trader again
• Will speak out against ALL traders
• What CAN you do?
• NEVER replicate a martingale
• If in doubt, demand your signal
provider for his TS Score
• Expose the fraud for what it is,
wherever you come across one
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19. Adjusting for (expected) Trade Duration
Gráfico de Fer
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20. Accounting for Correlation
Nominal View Actual / TS View
Equity EUR 10.000
LONG EUR/USD – 0.1 LOT
Open trades SHORT USD/CAD – 0.1 LOT
SHORT EUR/CAD – 0.1 LOT
EUR / USD (medium volatility)
Volatility /
USD / CAD (low volatility)
Risk EUR / CAD (high volatility)
Leverage 2:1 1:1
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21. Adjusting for Asset volatility
Gráfico de Fer
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22. Incorporating Market Volatility
Gráfico de Fer
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23. TS Leverage Management – What drives it?
Impact Rationale
• The longer you expect the trade to be, the • See dedicated slide
Trade
bigger the chance of drift -> the lower you
duration should set your nominal leverage
Correlation • Rho = +1 - > leverage adds up perfectly • See dedicated slide
• Rho = 0 correlation -> cumulative volatility
between equals square root of sum of squared volas.
Assets • Rho = -1 Hedge, leverage cancels out
Asset •Lower leverage for high volatility assets than • See dedicated slide
Volatility for low volatility ones
Prevailing • Low leverage on stormy markets (obvious, • See dedicated slide
Volatility isn’t it :-) but it still catches many unaware!
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24. TS Period – Progression levels Hay queponer
la progresion
del selloaqui
• Rookie • Signal • Pro
• 3+ TS • 6+ TS • 12+ TS
Periods Periods Periods
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