The greatest Pain Trade

It was Keynes who said that markets can stay irrational longer than you can stay solvent, but I’m proving to myself daily that I can also be irrational longer than I can remain solvent. When I was prop trading and a position was going sour (the tautologies abound) you would gradually adjust to the deteriorating situation in increments. You would first of all find yourself long in the middle of the spread, then matching the offered side of the market to come out flat, then it would trade down beneath your in-price. At this stage you doubled up and your loss was smaller but your position bigger.