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Rule 1. Never lose money

I’ve spent half a day at NLB going through some of the trading books especially on Trading Systems, Master of Trading Systems by Joe Krutsinger.

What is really useful is the last page which the strategy has been backtested with relevant statistic. What I realized is most of the strategy has 30-50% profitable trade. Meaning 50% of your trade will fail!

trading system

Masters of trading systems

What it is saying is cutting lost is the most important thing of trading! It is to help you preserve your capital.

What’s more interesting is that one of the strategy has a 1000% ROI but 30% profitability!

Now I’m truly enlightened!

Another link I would recommend on how to get out of losing stock. Interesting method. You should give it a try.

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  1. September 6, 2010 at 9:42 pm

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