Trading Article: Managing your
Trading Business
I cannot say this enough times, so I’m saying it again, you must learn to
keep your losses small. It is the single
greatest concept that I can show you that will help you make profits in the market.
This principle is of such magnitude that it dwarfs all other principles
for trade, money, and risk management.
Did you know that if you keep your losses small, you can flip a coin for
go long/ go short, and you will make money in the markets? Yes, without even the benefit of trade
selection you will make profitable trades if you learn to control your losses.
That means getting out as soon as you see that the trade is not doing
what it should.
I know that losing is contrary to human nature. I know how much you hate to take those
losses. I know how much you detest
admitting you are wrong, especially when you’ve put a lot of work and planning
into a trade. But consider this: If the trade doesn’t almost immediately go
your way, then you have made a mistake!
Either your planning was wrong or your timing was bad. The good trades almost always, quickly go
your way.
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