Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your ass. That’s why most people lose money as individual investors or traders because they’re not focusing on losing money. They need to focus on the money that they have at risk and how much capital is at risk in any single investment they have. If everyone spent 90 percent of their time on that, not 90 percent of the time on pie-in-the-sky ideas on how much money they’re going to make, then they will be incredibly successful investors.
– Paul Tudor Jones
It’s not about analysis; it’s all about risk management. You lose because of a lack of a risk control system.
To succeed in markets, we must take trades whose outcomes we still need to learn.
Irrespective of our analysis, any transaction can be a great loser. Hence our edge is in knowing exactly how much we’ll lose if things don’t work the way we calculated.
Please understand: Trading is a game of probabilities. Trying to predict the markets is a foolish way. It will lead us nowhere except for failure.
Never take uncalculated risks. You’ll not be able to survive the losses.
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