Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I'm getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis... I never think about [stop vulnerability], because the point about a technical barrier - and I've studied the technical aspects of the market for a long time - is that the market shouldn't go there if you are right.

Bruce Kovner

Categorized in : Thinking People Sleep

Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature.

physicians doctors analysis

Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.

taught next mistake

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.

cutting advice thinking

If you don't work very hard, it is extremely unlikely that you wi... by Bruce Kovner

If you don't work very hard, it is extremely unlikely that you will be a good trader.

unlikely traders hard

The first rule of trading - there are probably many first rules - is don't get caught in a situation in which you can lose a great deal of money for reasons you don't understand.

caught reason firsts

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose

dollars determined trade

The Heisenberg principle - If something is closely observed, the odds are it is going to be altered in the process. The more a price pattern is observed by speculators the more prone you have false signals; the more the market is a product of nonspeculative activity, the greater the significance of technical breakout

patterns odds principles

Michael [Marcus] taught me one thing that was incredibly important... He taught me that you could make a million dollars. He showed me that if you applied yourself, great things could happen. It is very easy to miss the point that you really can do it.

dollars important missing

If you personalize losses, you can't trade. by Bruce Kovner

If you personalize losses, you can't trade.

trade ifs loss

Novice Traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.

novices classic risk

In a bear market, you have to use sharp countertrend rallies to s... by Bruce Kovner

In a bear market, you have to use sharp countertrend rallies to sell.

sells use bears

My experience with novice traders is that they trade three to five times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks. The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.

risk emotional loss

I caught hold of the great bull market in soybeans in 1977. I had no idea what I was doing, incidentally.

soybeans bulls ideas

In 1983, I set up Caxton Corp. Its been an interesting and happy... by Bruce Kovner

In 1983, I set up Caxton Corp. Its been an interesting and happy ride since.

interesting

He is a dangerous demagogue completely unsuited to the responsibilities of a United States president, even for loyalists, there is a line beyond which the obvious moral failings of a candidate are impossible to disregard. That line has been clearly breached.

politics