Stock Market Trading: The 20 Rules of Engagement
"Good traders know how to make money; great traders know how to take a loss," and 19 other truisms to trade by.
7. Opportunities are made up easier than losses.
It's not necessary to bet every day; it's only important to have a high winning percentage on the trades you choose to make. In the end, your performance will be the cumulative sum of your decisions. Sometimes the ability not to trade is as powerful as trading ability.
8. Good traders know how to make money; great traders know how to take a loss.
Let your good trades run (trailing stops are a great tool) and flatten exposure if the stop-loss is elected or the catalyst passed. There’s no shame in making a mistake; there’s only shame in post-rationalizing your risk.
For more professional trading and investing tips, check out Minyanville's new MV Education Center.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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