You need to implement a trade in a way that limits your losses when you are wrong, and you also need to be able to recognize when a trade is wrong.
… what strikes me about really good managers (is that) they don’t get attached to their ideas.
You need a method that suits your personality.
People who like trading because they like gambling are always going to be terrible at it. For these people, the trading books could be greatly shortened to the message: “Don’t trade. You are really bad at this. So just don’t do it.”
Traders who are successful over the long run adapt. If they do use rules, and you meet them 10 years later, they will have broken those rules. Why? Because the world has changed.
Jack: How do you go long a bubble and protect yourself?
Colm: When it starts to go down, you sell it.
Jack: Are there traits that determine who will be a successful trader?
Colm: Perseverance and the emotional resilience to keep coming back are critical because as a trader you get beaten up horribly. Frankly, if you don’t love it, there are much better things to do with your life. You can’t trade because you think it is a way to make a lot of money.