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Future Trends from Past Cycles: Identifying share price trends and turning points through cycle, channel and probability analysis by Brian Millard

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2. Risk and the Markets

In my previous book (Channels & Cycles) I spent some time in the first chapter discussing money management. This is an important subject for traders and many have come unstuck owing to a failure to divide their capital into a number of parts which are traded in different stocks. I have always suggested dividing into eight, but certainly into not fewer than six. This means a total loss in one trade, while painful, can be accommodated. The discipline to stay with this partition of capital must be maintained at all times. Never put more than this one part into any one position, however positive the outcome might look at the time the trade or investment is being considered. Quite obviously the existence of risk means that ...

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