Risk & responsibility

What you can lose

The good news: you can never lose more than you stake. Buy $50 of Yes shares and the worst case is losing $50 — no margin calls, no liquidation spirals. The bad news: shares go to zero more often than beginners expect, and "almost happened" pays exactly the same as "never close."

Position sizing: the only rule that matters

• Risk 1–2% of your bankroll per trade while learning. A $500 bankroll means $5–$10 positions.
• Never add to a losing position to "get back to even." That's how small losses become account-ending ones.
• Decide your exit before you enter. "I'll sell if it drops to 30¢" is a plan. Watching it drop to 4¢ while hoping is not.

Why most short-term traders lose

• Fees compound. Every trade pays spread and fees; frequent trading needs a big edge just to break even.
• The market is the consensus. To profit consistently you must be right more often than the collective wisdom of everyone else trading — including professionals with models and data feeds.
• Confidence ≠ edge. Feeling sure about an election is not the same as the market mispricing it. If everyone feels sure, the price already reflects it.
• Emotions trade badly. Revenge-trading after a loss and over-sizing after a win are the two classic account killers.

A sane starter framework

1. Set a learning budget — an amount you'd spend on a course or a hobby, and consider it tuition.
2. Paper-trade first — track hypothetical trades for a few weeks. If you can't beat the market on paper, you won't with real money.
3. One thesis per trade — write down why the market is wrong, in one sentence. No sentence, no trade.
4. Review monthly — tally wins, losses, and fees. Most people are shocked by how much went to costs.
5. Walk away rules — decide in advance what loss total means taking a break. Then honor it.