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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (9315)	10/5/1998 8:54:00 PM
From: Sergio H	Respond to of 29382

From www.bizfn.com: Tip Of The Day "Marcus learned about the dangers of overtrading the hard way. In one instance, an account he had built up from a very small stake to $30,000 was wiped out by betting all his money on a single trade. He made the same mistake a second time in the lumber market, coming to the brink of disaster before narrowly escaping. These experiences had a dramatic impact on Marcus' trading philosophy. It is no accident that the first rule he cites when asked to give advice to the average trader is: Never commit more than 5% of your money to a single trade idea." Market Wizards, p.49, 1989. Also, a good way to guarantee your survival in a market where the implied risk has shot up is by reducing your position size almost down to something that seems to be a waste of your time. When you do this, you reduce that implied risk back down to acceptable levels and allow yourself room for error. Room for error is vital when the circumstances in the market can create lots of them.