1. Only use money that you can 100% afford to lose.
2. Once (if..) you've made some profit, take out your initial investment and now you're gambling with free money.
2. Once (if..) you've made some profit, take out your initial investment and now you're gambling with free money.
I never understood this sentiment, and I'm surprised to see it so often on Hacker News. It's irrelevant whether the money came from profits or initial investment - money is money? There is no need to distinguish the both, it's purely psychological.
[0] https://en.wikipedia.org/wiki/Loss_aversion
[1] I'm all for risk, but Vegas has better odds.
There is zero reasons to lose money or carry on running a losing strategy. If you are trading professionally and quantitatively, you are runnings lots of positions. Unless you have a technical issue, you should not worry about losses on one or a few positions since you only care about what your average is doing.
That assuming your models work but you should not start trading with real money before you are certain of that.