There will be times that everything you bought went down and everything you sold went up. Remember that trading should be fun. To keep it that way, never risk enough at any one time that it becomes too serious.
2. A large catastrophic loss can occur by just once disregarding any one of your rules! Murphy’s law is an adage stated as “Anything that can go wrong will go wrong”. His law practically guarantees that the one time you do it, will be the one time that the market will move so adversely as to hurt you.
However, don’t blame Murphy. The real answer is that the market is a formidable adversary…a gladiator opposing you in the ring. Like a gladiator, it should be expected to take advantage of every mistake you make. Let your guard down just once and it will thrust hard at a vulnerable place and you will lose much blood.
3. There are many good traders who day in and day out, follow the rules…keep their guard up…and then just once become so sure they are right that they go against one of the rule. They drop their guard, begin to hope, and lose much money. In a few days, more can be lost than is gained in a year.
I know many traders and stock brokers (myself included) who have wiped out their accounts by just once letting their guard down. I don’t know a single trade who was wiped out when following the rules. No one ever bled to death from pin picks. Pin pricks do not mortal wounds make! It’s the deep gashes that hurt.
Watch your losses very closely and your gains will take care of themselves.
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