Who Makes Money Consistently

• Aside from the small number of professional operators, who scalp in large volume and pay only negligible commissions or clearing fees, the traders who make the big money on a consistent basis are the longer-term position traders. They tend to be trend followers.
• I have been fortunate to have been on the right side of some big positions and big profits, some of them held for as long as eight or ten months and, as related later, one actually held long for five years.

Go For the Big Move, Even If You Know Most Moves Are Small

• Every time you assume a market position in the direction of the major trend, you should premise that the market could have major profit potential and you should play your strategy accordingly. By doing so, you will be encouraged to hold the position and not look for short-term trades.
• Your perception tells you to hold every with-the-trend position, looking for the big move. Your sense of reality tells you that most trades are not destined for the big move. But, since you don’t know in advance which trade will be wildly successful and since you know that some of them will be, the strategy of choice is to assume each with-the-trend trade can be the ‘big one’; and let your stops take you out of those trades which fizzle.
• The annals of financial markets are replete with real time examples of markets that started most unimpressively, but then developed into full scale mega-moves. Meanwhile, most of the original participants who may have climbed on board at the very inception of the move, got out at the first profit opportunity and then watched as the market continued to move very substantially, but certainly without them.

Never Allow a Good Profit to Turn Into a Loss

• Advance your stop (if long, raise the stop; if short, lower the stop) after each Friday’s close, by an amount equal to 50% of the week’s favorable move.
• Eventually, the market will reverse and stop you out; but if you have enjoyed a good run, you will have advanced into a no-loss stop position and, ultimately, a profitable one.