The first and greatest rule in speculation is position sizing, not entries, exits, charts, tips, or timing, as it protects capital and allows traders to survive market fluctuations.
Proper sizing enables traders to remain calm and disciplined, avoiding desperation and reckless decisions, which is crucial for long-term success in trading.
Psychology and Discipline
The market is indifferent to a trader’s intelligence or confidence, caring only about capital, emphasizing the importance of protecting it through disciplined position sizing.
The true courage in speculation lies in the ability to wait, which is only possible when positions are sized correctly, allowing traders to let the market work without feeling pressured.
Professional Approach
Speculation should be treated as a profession, not a lottery, requiring traders to last, accumulate slowly, and respect their capital more than their opinions.
Successful traders approach the market with the discipline of a banker counting money, rather than the bravery of a soldier charging into battle.
Winning Strategy
Winners in trading keep their losses small through proper sizing, while losers let their mistakes become ruinous due to oversized positions driven by greed.
The larger the bet, the quicker the chances of going broke, contrary to what beginners might think, highlighting the importance of consistent, well-sized trades for longevity in the market.