Chapter 20. The Blowup
Predicting the unpredictable is the great challenge in trading. It is impossible to be correct all the time, and this is why you implement a system that gives you a slight edge. I have had many profitable months where on review I learned that I had just about the same number of losing trades as I did winning trades. In fact, my winning percentage has sometimes been below my losing percentage and yet I have still managed to eek out profitability.
As a trader, your goal is to execute a system that doesn’t seek to eliminate losing trades but rather contain them in a manageable way. It is a system that attempts to capitalize on incremental gains over time while allowing at least a portion of your winning trades to run to their ...
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