Hedge funds bought $6.8 billion of US equities last week, the largest single week in 18 years. Measured against the S&P's market cap it ranks among the 9 biggest weeks since 2008, and it came right on top of $4.8 billion the week before.

Two straight weeks of enormous buying into a market already at record highs.

Here's the part worth your attention, and it has nothing to do with whether they turn out to be right.

Not one of those desks sized that position by feel. Every one of them knew, before the order went in, exactly what the loss looks like if the trade fails. That number got decided first, and the size was backed out of it.

That's the whole difference, and it isn't talent. It's sequence.

Retail runs it backwards. You find the idea, you get excited, you decide how much you can scrape together, and then you hope.

The risk number gets calculated later, usually while the position is already red and your stomach is doing the math for you.

I spent 15 years inside the brokerage industry watching both sides of that trade. The professional decides what a loss costs before deciding how much to buy.

Nobody ever taught the retail account to do the same thing, because entries are what the industry sells.

You can run the professional sequence on any trade you place, and it comes down to 2 numbers.

Get the 2 numbers the pros settle first

To your success,

Don Kaufman