Interview
When Story, Fundamentals, and Technicals Align · Julian Komar
- Anticipates accepting normal drawdowns of five to seven consecutive losses while maintaining conviction in trading abilities to recover.
- Expects sector rotation to occur, predicting newer technology companies like Rubrik or Zscaler will eventually overtake slower-moving giants like CrowdStrike.
- Plans to limit exposure to no more than three stocks per theme or sector to avoid concentration risk, citing errors made during the January 27 DeepSeek event.
- Allocates 10 to 15 percent of capital per position during favorable market conditions, reducing this to 5 to 10 percent during adverse or sideways markets.
- Warns that position sizes of 30 or 40 percent could result in disasters if a position gaps 20 to 30 percent against the trader, whereas smaller sizes allow for recoverable damage.
- Predicts that traders using options with large position sizes to generate rapid gains face high risks of account disaster.
- Expects to avoid account crashes over time by systematically eliminating mistakes such as letting losses run.
- Attributes the 90 percent trader failure rate primarily to the inability to execute an identified edge rather than a lack of edge.
- Identifies overconfidence following strong performance runs as a key risk that leads to taking mediocre setups and incurring drawdowns.
- Notes a recurring pattern of losing money whenever trading approach shifts to a short-term view or attempts to increase speed conflict with personal trading personality.
- Believes current AI models lack the training to distinguish fine chart pattern details, though anticipates a significant shift in trading methods in approximately 20 years as AI improves.
- Projects AI will likely serve as a decision-support tool for stock selection or pattern analysis rather than reinventing market structure or trading fundamentals.
- Cites the Lindy effect to support the expectation that chart patterns will remain consistent for a very long time, referencing historical data from 1700.
- Observes that increased information access and better tools do not inherently improve trader success rates or change the high probability of failure.
- Suggests that traders seeking quick wealth tend to fail, while quiet, systematic approaches are more likely to yield long-term progress.
- Recalls that deviating from intuition or pattern-based trading instincts consistently results in financial losses.
- Estimates a low probability of the specific DeepSeek event repeating in the exact same manner within the next one to two years.