"Cut your losses. Let profits run." Traders chant this mantra all the time, but what does it really mean? I went over my trades in Account 1 last year and here is what I found:
In 2008, I made 12 trades in this account. Only 4 were winners. That translates into a 33% winning percentage; yet, we still made over a 100% return!
My takeaway from this review exercise:
1. Be patient and wait for the proper chart setups.
2. Once your entry price is triggered, take your predetermined position size.
3. If you are wrong get out. (Cut losses!)
4. If you are right, sit back and objectively observe the trade. (Let profits run!)
5. If you are trading well, the charts tell you when to get out.
I know this is easier said than done. But do not worry, as the year progresses we will certainly have some money making opportunities. And when the trades do appear, I will walk you through them so we can make some $$$. So stay tuned!