Invest in the market you know best. I think paper shocks are pretty liquid,and also a good longer-term hold.

In real life, parameters are different. In my mtgo account, I know precisely how many tix are available, how many tix were invested to start with, etc. In real life, I make money every week, I buy cards from online stores and ebay and I lost track of how much money I injected into this. So the 5% rule is very difficult to apply when there is no precise number to determine your real entry cost into this market. If for sure, you are determined to stick to the 1000$ investment in paper, then investing on a single card worth 150$ is committing 15% of your portfolio. The Return on Investment (coming soon, with Jeff’s maths to support it) might not be very high. Depending on your outs, Library might be harder to move than 150$ worth of shocklands.

Moreover, let’s just analyse quickly your comment: You bought a card, and now the investment is large enough that you are getting worried. Being worried will make you doubt, and could potentially lead you to bad decisions (either keep the card for too long, or get rid of it too early). If you feel uncomfortable with your investment, take note of that, and reajust for future buys, both for paper or online cards.

The 5% rule should be understood as a diversification rule, to avoid a crash in one part of the market whre you have put most of your money, crippling your bankroll to an unrecoverable level. With 500$ online, 5% means 25$ per target. It also means you should have 100-125 tix available for very short term flips, and invest the rest across formats you know well, and towards decks you are familiar with too.

I hope some better paper traders will jump in, so they can provide you with recommendations for your Library. Or ask on the forums for tips!

So acording to the 5% Rule it would almost never be a good Idea to invest in power 9 in Real cards?

I just got a Library of alexandria for $150 and am worried it was a bad call.

are shock lands ever liquid enough to count on? or are they still to risky.

should treat my online portfolio and Real life magic investments together or separate?

insted of putting $1,000 into Modo ive put 1,000 into physical cards and $500 into modo.

was that a bad Idea? I just figured I knew the phiscal market better.

To Alexander, I would love to add another concrete example with last fall (or was it this winter?). Jeff and I had read on SCG and on QS (ty Doug) that there was a lot of heat for Olivia Voldaren. Back then, I confirmed to Jeff that the mtgo secondary market was being bought out of Olivias and they were nowhere to be found. We felt strongly about the card and went to the major bots to buy our copies. We decided to stick to the 5% rule because we could have misread the market, and because it would have locked most of our remaining money to that target. Also, people on Qs were not all agreeing on that spec, which helped us stay cool. 3 days later, we were flippinig our copies for 90-100% profits. We first thought: “We knew it, we should have gone for more”. But rapidly we remembered that 1) we respected our rules, 2) managed risk properly, 3) kept some tickets for future targets, 4) we have been confident with other targets before that didn’t make any money, so we never know… So, the “we should have gone deeper” is flawed in many ways. Instead of thinking about the “lost” tix (if we had bought up to 10-15% of our bankroll), we immediately talked to each other making sure we were reinforcing our good behaviours (discipline, bankroll and risk management, right read of the market, right read of the meta). It makes all the difference in the world.

@ Matt, we did all the mistakes listed + we are still doing some! For example, last week I spotted geist of saint traft as a good target and told Sébastien that we should buy lot of them. We tried to go on secondary market (other players) instead of buying everything from the bots. Only to save 0.5 or 0.75 tix per card. results:we could have make an easy 5 tix per card in less than one week but now we ended with only 8 copies because the market was so dry…We dont always learn from our mistake.

@Alexander yep sometimes it’s hard to stick to the 5% rule. Especially when you have low bankroll. Now it’s easier for us because 5% means a good amount of money and means a strong position. The 5% rule is a poker theory and when you go deeper into math calculation, it is just the right amount to avoid bankruptcy and to be able to absorb variation. It will help you in lot of ways to stick to it. Now if you have 7-8% dont panic. Its ok. I think 15% is too much because 2-3 bad moves and it might cripple your bankroll a lot. I guess the more experience you have, the more you can judge by yourself the proper %. But I saw lot of guys going on tilt in poker after playing too high for their bankroll…Blowing in one night 3 years of good poker. Maybe trading is a bit different, but when things turn bad and you have put so much time trading, you might do something stupid just to catch all the money back. Believe me it,s the worst thing you can do and you never know how you will react until it happens. I have been through this process way too many times. Now I try to stick to it. As for the boosters part, yeah, I dont consider boosteers the same way because it,s so easy to sell them and its always a sure shot when you know the structure of the drafts. Not like individual cards where the meta shifting is way too important.

just a little mathematic fact here: A=1,B=2,C=3,D=4….Z=26

Discipline=4+9+19+3+9+16+12+9+14+5 =100%

Thats right, if you want to have a perfect note, the key is DISCIPLINE

ty for your time guys and remember to come talk with us on MTGO or in the forum my name is altaran2

I super agree on the Pitfalls and found myself dealing with many of them frequently! Avoiding these pitfalls and sticking to predefined guidelines with discipline is a 99.99% (I really should say 100%) success guarantee.

To reply to Alex, if you consider yourself a beginner, following the 5% rule should really put you away from any bankruptcy. Personally, I’m between 10 and 15%.

Even we with the “spec of the year” lined up and a lot of Tix available I really try not to put more than 15% of my bankroll in it. Who knows? Maybe the “spec of decade” is just minutes away and I still have cash available to get in (with no more than 15% 😉 because the “spec of the century” could be right at corner!

I really appreciate the rational associated to concrete examples you put in yours theories guys!

Do you always hold to the 5% rule? A while back I noticed you had 15% of your portfolio in RTR boosters. I assume boosters are somewhat different because they are so liquid?

I found that staying liquid was very difficult early on in my speculative career. If I ever had a few hundred tix in my account, I would get an itchy trigger finger and want to get it invested right away. The result was that I would often I would talk myself into marginal specs. And when the inevitable strong, short term opportunity popped up, I would either miss out or have to sell out a position too early.