Liking this duet
I'm digging through oldish posts
digesting takes time
My own assumptions? "I'll never hit that wall because I keep my gameplay far from the sidelines." Taken to extremes: if I had infinite capital, I would not worry a bit.
If we had infinite capital, infinite time we would all be rich.
Capital is finite and time is finite. I don't know if it is better this way, but it surely so much more funny.
You're right fillippone, hence the worry (not without the occasional "fun", I must admit). 100x leverage doesn't make my capital "infinite" unless my position is under 1/100 of my play stash (and even then, nonlinearities and verlakkerijen ensue if said stash is within 2-3 orders of magnitude of the exchange's actual open interest). Nothing will make my time infinite (well, maybe a team in the goossens sense - but then, infinte team turnover becomes a necessity and we don't want to go there, do we). Both "stashes" are finite indeed - and both have hard upper bounds of sorts.
So I see your point, but you must admit my view has merit too.
You earlier said which is the "best" (only, actually) way of thinking.
If you are trading with linear assets there's no other other way to sum all of your positions and think about only as a SUM. the worst you can think is where you bought some corn and you have to sell it above that level to gain.
( TL;DR +10 long, -1 short = +10 - 1 = +9 long )
It might be the worse way in certain cases, but in my own case it made me real BTC. So where's the catch? Me not considering the positions as summable? If it's that, it's a powerful tool!
Your view
is the best under certain assumptions: same instrument, closed at the same time, linear. Under others, (mainly: different time span) it isn't. Which doesn't imply the second view is better. It does become strictly better if you have infinite capital and time, and infinitely better if you also have perfect forward information. The option of removing dough from the table is a big help too, as it allows me to chicken out whenever I fancy. Agreed, it's a derivative play involving manual labor.
Summing up, my numbers say that even with finite resources, the "second" system can be put to work. And I'm pretty sure my own set of rules is not the only one that can produce statistical profit in waters such as those we are sailing atm. Maybe someone is able to formalize this in an orthodox way, or to make more sense somehow. You? Hairy? Marcus? V8? Any others?
#haiku