“I start by deciding where the market would have to go for me to be wrong. That’s where I place my stop. That means that it’s not difficult for me to get out of a position if the market goes there. The most common money management error I see is people setting stop losses that are really pain thresholds. When the market reaches their stop, they don’t really want to get out because they still think they are right.”
“It was at that point I said, “Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?” That was when I first decided I had to learn discipline and money management. It was a cathartic experience for me, in the sense that I went to the edge, questioned my very ability as a trader, and decided that I was not going to quit. I was determined to come back and fight. I decided that I was going to become a very disciplined and business like about my trading.”
