The trading rules I live by are: 1. Cut losses. 2. Ride winners. 3. Keep bets small. 4. Follow the rules without question. 5. Know when to break the rules.
My style is basically trend following, with some special pattern recognition and money management algorithms.
If you can’t take a small loss, sooner or later you will take the mother of all losses.
Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top.
Traders and Surfers both have to deal with feelings of missing out on the small ones, until the big one comes along. They also have to deal with feelings of staying with the big one.
Risk no more than you can afford to lose, and also risk enough so that a win is meaningful.
The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.
It can be very expensive to try to convince the markets you are right.
The elements of good trading are: 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance.
The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.
I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.
Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.
A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.
I don’t predict a nonexisting future.
Working to anticipate the future can be a distraction from the important task of dealing with the present.
Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, while others were even smarter and got born lucky.
A lot of people would rather understand the market than make money.
If you can’t measure it, you probably can’t manage it. Things you measure tend to improve.
To avoid whipsaw losses, stop trading.