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Variance and volatility are not the same thing.
Variance is a personal danger for gamblers. Over the very long term everyone gets equal cards. Short term, say less then a year for a frequent player, Things can run very good or very bad. This creates two dangers that gets poker players broke. We can think we are much better than we are, play at too large a table, and hit reality. Second we may lose at tables we know we can beat, and step up in size to re-coup our dwindling bank roll quickly.
volatility is the danger for speculators. volatility is a group effort, except for force majure events, historic volatility normally is calculated into any trade, with maybe a bit of a kicker for implied volatility. The danger here is that the science can be so convincing we may over leverage, and a quick move may blow us out. Second we may lose at trades we know we can beat, and step up in size to re-coup our dwindling bank roll quickly.
Understanding the real risk is the issue. A move up in size may expose our bankroll to far greater threats than we anticipate. The markets, and the players, have no rational basis for anticipating force majure events. Years of small steady, reliable gains can vanish quickly.
An option trader that skims small amounts off volatility trades with huge leverage can make large amounts of money, year after year. One big event though can wipe him out.
In investments that's called, "eating like a bird, pooping like an elephant."