It's much easier to learn what you should do in trading than to do it. Good systems tend to violate normal human tendencies.

You can be very promiscuous in your research, but not in your trading.

Amateurs go broke taking large losses, professionals go broke taking small profits.

If the losses don't hurt, your financial survival is tenuous.

I take the point of view that missing an important trade is a much more serious error than making a bad trade.

The market likes to lull you into the false security of high success rate techniques, which often lose disastrously in the long run. The general idea is that what works most of the time is nearly the opposite of what works in the long run.

Investing is a negative game emotionally. If you're playing for the emotional satisfaction, you're bound to lose, because what feels good is often the wrong thing to do. When all the criteria are in balance, do the thing you least want to do.

What feels good is often the wrong thing to do.

Good systems tend to violate normal human tendencies.

One common adage...that is completely wrongheaded is: You can't go broke taking profits. That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits.

Large profits are even more insidious than large losses in terms of emotional destabilization. I think it's important not to be emotionally attached to large profits. I've certainly made some of my worst investments after long periods of winning.

I haven't seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren't. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.

Don't think about what the market's going to do you have absolutely no control over that. Think about what you're going to do if it gets there.

The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance.