Eric Bolling: Cut losers quick is the key to making money.

A

ang_99

Simple, right?

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I'd say the key is first to be right a good amount of the time and then to cut losers quickly. If you just know how to cut losers quickly, you're still losing money :)
 
Plus you dont want to get into the habit of getting rattled every time the mkt ticks against you a little bit. You can condition yourself to take tons of small losses just because you are trying to keep losses small. Death by 1000 cuts or whatever is the saying.
 
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I'd say the key is first to be right a good amount of the time and then to cut losers quickly. If you just know how to cut losers quickly, you're still losing money.
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Plus you dont want to get into the habit of getting rattled every time the mkt ticks against you a little bit. You can condition yourself to take tons of small losses just because you are trying to keep losses small. Death by 1000 cuts or whatever is the saying.
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key is making more money than you lose
people have a tendency of small loses = small targets
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Unbelievably, I experienced EACH of the above when sim trading the ER2 contract this past summer and fall. I hadn't traded the eminis a while, so before I went live, I thought I'd get a read on my trading technique and performance.
First off, I was going short most of the time....I'd wait for a peak, then a fall-off, and let it rip. Natch, I was selling right as the "buy-on-the-dippers" were going long....and I was wrong, really wrong. I'd sometimes get stopped-out in 2 seconds.
I never had any large losers...always used stops. At the end of 6 weeks, I saw a win rate of just 20%.....and I was down $1500 per contract. Near the end of that "experiment", I was taking small profits....fearing to lose them back. So bottomline: many small losers, some small winners, few big winners, and no big losers is a losing strategy. The market will just take your money all in good time, instead of all-at-once a la Vic Niederhoffer.
Good posts all - obviously you are experienced traders.
 
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