| If you are system trading stocks with your own | | | | point in Mike's life even with the ups and downs of |
| trading system you no doubt are very familiar with | | | | the market his portfolio has shown steady |
| the phrase, "cut your losses but let your winners run". | | | | improvement. |
| Rarely will you get an argument that this is what you | | | | What Mike hasn't experienced yet and doesn't realize |
| MUST do to stay profitable day trading, swing trading | | | | is that a dramatic drop in his portfolio of 40%, 50% |
| or position trading. | | | | even 60% can devastate him in two ways. Loosing |
| Every Wall Street survivor has assumed the role as | | | | nearly $190,000 is certainly depressing enough but |
| his own personal hedge fund stock system manager | | | | TIME may be his biggest loss. |
| and is doing something right as it relates to managing | | | | A $190,000 portfolio value may represent an account |
| inevitable losses against hoped for gains.. It's the | | | | balance as of twelve years ago. Additionally, who |
| casualties in stock trading or any so called system | | | | knows if Mike will ever make up the dollar loss in the |
| trading that, upon position entry, fail to set an | | | | years ahead and the years ahead are a big unknown |
| inviolate stop loss, afraid to take a small loss to avoid | | | | in terms of just how many there will be. |
| a bigger disaster. Whether you are trading stocks, | | | | The point that I would like to emphasize is that out |
| crude oil or options picks you must be almost 100% | | | | investing lives are shorter, sometimes very much |
| mechanical in controlling your losses. | | | | shorter, than our natural lives. A loss in the metric of |
| The losses I am talking about controlling are | | | | time multiples the loss measured in the metric of |
| measured in dollars (or some currency) and the | | | | dollars. We want to minimize both but only have |
| concept is not a next generation trading system. | | | | control over one. |
| There is though another metric of loss, another unit if | | | | Whether you are investing, day trading, system |
| you will, that most people never factor into their | | | | trading or seeking options success you must have |
| decision bar. That measure of unit is TIME. | | | | and faithfully execute a disciplined loss minimization |
| Let's say Mr. Michael Market, like many other people, | | | | regimen. Over time the pain of experiencing small |
| has a stock portfolio that has grown over the years | | | | losses will decrease and perhaps even be eliminated |
| to $378,000. Mike, like many others, is of the buy | | | | knowing that you have avoided the one loss from |
| and hold invest for the long term persuasion. To this | | | | which you will never recover. |