You have to minimize your losses and try to preserve capital for those very few instances where you can make a lot in a very short period of time. What you can't afford to do is throw away your capital on suboptimal trades.
I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.
When you have a position, you put it on for a reason, and you've got to keep it until the reason no longer exists.
I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.
Trading decisions should be made as unemotionally as possible.
I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.
Trade small because thats when you are as bad as you are ever going to be. Learn from your mistakes.
There is another point that I think is as important: You should expect the unexpected in this business; expect the extreme. Don’t think in terms of boundaries that limit what the market might do. If there is any lesson I have learned in the nearly twenty years that I’ve been in this business, it is that the unexpected and the impossible happen every now and then
The market being in a trend is the main thing that eventually gets us in a trade. That is a pretty simple idea. Being consistent and making sure you do that all the time is probably more important than the particular characteristics you use to define the trend. Whatever method you use to enter trades, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend.
A good trend following system will keep you in the market until there is evidence that the trend has changed.
When things aren't going right, don't push, don't press.
You should always have a worst case point. The only choice should be to get out quicker.
When you are getting beat to death, get your head out of the mixer.
Trading has taught me not to take the conventional wisdom for granted. What money I made in trading is testimony to the fact that the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I've learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they're almost always wrong.
I could trade without knowing the name of the market.
