• It’s much easier to learn what you should do in trading than to do it. Good systems tend to violate normal human tendencies.

• Two cardinal sins of trading — giving losses too much rope and taking profits prematurely — are attempts to make … positions more likely to succeed, to the severe detriment of long-term performance.

• The people who survive avoid snowball scenarios in which bad trades cause them to become emotionally destabilised and make more bad trades. They are also able to feel the pain of losing. If the losses don’t hurt, your financial survival is tenuous.

• In many ways, large profits are even more insidious than large losses in terms of emotional destabilisation. I think it’s important not to be emotionally attached to large profits. I’ve certainly made some of my worst trades after long periods of winning. You start to think you can afford shoddy decisions.

• As a general rule, losses make you strong and profits make you weak.

• I take the … view that missing an important trade is a more serious error than making a bad trade.

• Don’t think about what the market’s going to do; you have absolutely no control over that. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be.