Don’t overtrade. If you are trading several markets and not having any success, cut back to trading one or two markets. You can follow fewer trades more closely and document your success or failures more easily. Plus, your trading account won’t be drawn down so quickly.
The Importance of Position Sizing 2
You lose whatever you risk when tails comes up and you win twice what you risk when heads comes up. If R stands for you risk, this system is characterized by the two R-multiples it generates: 1) – 1R (when you lose, you lose what you risk and R stands…
The Importance of Position Sizing
I did a retreat with one of the world’s greatest traders in 1989. At that retreat he talked about a simple trading system. It was a system in which you flipped a coin. If the coin came up heads, you won twice what you bet. If the coin came up…
People Think It’s All About Prediction — But It Is NOT!
Your trading style forms a basis for your beliefs about how to enter the market. This is important because you really only trade your beliefs about the market. It’s very hard to trade something that’s going up if you believe it is overvalued. Similarly, it’s very hard to trade something…
Position Sizing Continued
osition sizing is that part of your system that tells you “how much†throughout the course of the trade. And, assuming you have a positive expectancy system, that variable, along with your personal psychology, controls about 90% of the variability of your performance in trading. THAT’S HOW IMPORTANT IT IS….