Risk Management

Position sizing, drawdown control, portfolio risk budgets, and the specific rules I run to keep single trades from killing a whole account.

1. GEV on the Yahoo Trending List Tells You One Thing. ATR Tells You Everything Else.7 min
GE Vernova's trending rank signals attention, not edge. Realized volatility and sector regime do the actual work of sizing a GEV position safely.
2. IV Rank, IV Percentile, and Skew7 min
IV rank, IV percentile, and 25-delta skew answer three different volatility questions. Together they drive trade structure, sell strangles, buy calls, or exit.
3. Portfolio Attribution: Where Your Returns Actually Come From7 min
Beating the benchmark by 400bps feels good until attribution tells you it was all allocation luck on one sector call. Selection vs. allocation vs.
4. Portfolio Audit Trail: Every Decision7 min
Regulated managers need an audit trail. The Audit Trail card on alphactor.ai records every trade, rebalance, alert, and note into one timestamped log you…
5. Portfolio Credibility7 min
Conviction is self-reported; credibility is externally anchored. The two diverge exactly where mistakes live, an 8% position in a name you love with a…
6. Portfolio Earnings: Calendar, Exposure7 min
Earnings risk is about the whole book into the week, not each position. When 40% of NAV reports in one week, and 60% of that is in a single sector, you're…
7. Factor Exposure7 min
Factor exposures are bets whether or not you chose them. Decomposition surfaces unintentional tilts before a rotation exposes them as underperformance.
8. FX Exposure: The Currency Risk Hiding in Your USD Portfolio6 min
You bought US stocks in dollars, so you have no FX risk, right? Wrong. US large-cap multinationals earn 40-60% of revenue abroad.
9. LP Report: Institutional-Grade Portfolio Summaries7 min
Reporting is the tax on managing other people's money. A good LP report system takes a 12-hour manual job and turns it into a 90-minute review-and-polish…
10. Portfolio Optimizer: From Holdings to an Efficient Frontier7 min
Naive mean-variance overweights recent winners. Running MVO, risk parity, and Black-Litterman in parallel shows which allocation choices are robust vs. fragile.
11. Portfolio Rebalance: Turning Drift Into Scheduled7 min
Portfolios rebalanced on a schedule beat portfolios rebalanced 'when it feels right.' Feel-right under-rebalances winners, over-rebalances losers, and stops…
12. Transaction Cost Analysis7 min
Implicit costs run 10-50 bps per trade; at 2x annual turnover that erodes 40-200 bps of alpha. Slippage breakdowns show which venue or size is responsible.
13. Half-Kelly Position Sizing4 min
Half-Kelly gives about three-quarters of full Kelly growth while cutting drawdown by roughly 50%, making a theoretically optimal bet practically executable.
14. A Position Sizing Framework That Won't Keep You Up at Night4 min
A practical position sizing approach built on simplified Kelly criterion, risk-per-trade limits, and portfolio-level allocation guardrails.
15. Risk Management for Retail Portfolios4 min
Practical position sizing, stop-loss strategies, correlation awareness, and drawdown limits for retail investors managing their own money.
16. Why Most Backtests Lie5 min
How Alphactor's 8-layer credibility pipeline catches overfitting, data snooping, and curve-fitted strategies before they cost you money.
17. The 5 Position Sizing Mistakes That Blow Up Accounts4 min
Position sizing errors kill more accounts than bad stock picks. Here are the five most common mistakes and how to avoid each one.
18. Value at Risk in Plain English4 min
VaR is the most widely used risk metric in finance. It is also the most misunderstood. Here is what it actually means and where it fails.
19. In a Crisis, All Correlations Go to One4 min
Diversification fails exactly when you need it most. Here is why correlations spike during crises and how to build portfolios that survive it.
20. Survivorship Bias: The Invisible Flaw in Your Stock Screener4 min
Survivorship bias silently inflates backtest returns and warps stock screener results. Here is how it works and what to do about it.
21. Revenge Trading: How One Bad Day Becomes a Bad Month4 min
Revenge trading is the single fastest way to turn a manageable loss into a catastrophic one. Here is how it works and how to break the cycle.
22. Why Maximum Drawdown Is More Important Than Annual Return4 min
Maximum drawdown reveals what your portfolio almost did to you. Here is why it matters more than the number everyone brags about.
23. Stop Losses: Fixed, Trailing, or Volatility-Based4 min
A practical comparison of fixed, trailing, and volatility-based stop losses with real scenarios showing when each type works and fails.
24. A 30% Drawdown Requires a 43% Gain to Recover4 min
A 30% drawdown requires a 43% gain to recover. The asymmetric math explained, with sizing rules to prevent one bad trade from permanently impairing the account.
25. Risk Parity: Allocating by Risk, Not by Dollars4 min
How risk parity portfolios work, why they differ from traditional allocation, and how to apply the concept without a PhD in finance.
26. Debt-to-Equity Ratio4 min
How to evaluate a company's debt load, when leverage creates value, when it destroys it, and the sector-specific thresholds that matter.
27. ATR for Position Sizing5 min
How Average True Range normalizes risk across stocks, sets intelligent stop losses, and determines position size based on volatility, not gut feeling.
28. The Bollinger Band Squeeze4 min
Bollinger Band squeezes predict volatility expansions. Here is how to identify them, measure their intensity, and avoid the false breakouts.