Money Management & Positive Expectancy

A good trading system gives you an edge in the market.
To use a technical term, it provides a positive expectancy over a long series of trials.
A good system ensures that winning is more likely than losing over a long series of trades.
If your system can do that, you need money management.
But if you have no positive expectancy, no amount of money management will save you from losing.

Dr Alexander Elder, Come Into My Trading Room

Risk / Money Management Strategy

Never risk more than 1% of your total equity in any one trade.
By risking 1%, I am indifferent to any individual trade.
Keeping your risk small and constant is absolutely critical.

Larry Hite

Get Out When You’re Wrong

Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when they’re wrong.
Being right is not the problem. What you do when you’re wrong is the crucial issue.

There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way.
Most traders average down and wait for the market to turn their way.
Trading my way, I always have defined amount of money that I am willing to lose.
I let the market decide how much money I’m going to make.

Casey (In "“The Logical Trader” by Mark B. Fisher)

Source: Options Trading Beginner

Have A Plan

In trading, as in life, you need a plan. This plan includes not only the micro – a strategy for each and every trade you make – but also the macro – meaning why you trade, how you intend to reach that goal (your means to the desired end), and what you’ll do as an alternative if that doesn’t work out.

Know what you want to accomplish, how you intend to get there, and what you will do if it does – or does not – work out. Have a plan and stick with it. That works in trading, as well as in life.

Mark B. Fisher, The Logical Trader

Source: Options Trading Beginner

The Importance of Trading Records / Diary

Records are more important to your success than any indicator, system, or technical tools.
Even the best system is bound to have some holes, but good records will allow you to find them and plug them up.
A person who keeps detailed records makes a huge leap in his development as a trader.

Show me a trader with good records, and I’ll show you a good trader.

Dr Alexander Elder, Come Into My Trading Room

Stop A Losing Streak

The best way to stop a losing streak is to STOP!….
Stopping lets your emotions calm down and lets you reestablish your momentum with your intellect.

Marty Schwartz

Risk Management & No Overtrading

Risk management is the most important thing to be well understood.
Undertrade, undertrade, undertrade is my second piece of advice.
Whatever you think your position ought to be, cut it at least in half.

Bruce Kovner

Money Management – Manage Your Downside

Being wrong is acceptable, but staying wrong is totally unacceptable.
Being wrong isn’t a choice, but staying wrong is.

To play any game successfully, you have to have some skill, an edge.
But beyond that, it is money management.
Good traders manage the downside;
they don’t worry the upside.

Mark Minnervini