If you read about many of the great traders
in history, you’ll find that a very large percentage of them blew out (lost all
their money) at least once, and some of them blew out two or three times in
their career. Add to this the fact that only about 5% of commodity traders make
money, and you have to wonder. “What’s going on here”.
There are many reasons why people lose
money in the market, but one huge and easily avoided mistake is putting too
much capital at risk in a single position betting it all. The mistake arises
because people don’t set forth a business philosophy for themselves before
making a trade in the markets. Many
people make the mistake of thinking that market behavior is truly predictable.
Nonsense, trading in the market is an odds game, and the object is to always
keep the odds in your favor.
---Victor Sperandeo
