When risking 1% of account capital per trade, a trader could bounce back and recover, but when risking 5% a losing streak can be devastating.

• It is wrong to conclude that any trading style that matches your personality will work. You must have both: a trading style that works and one that matches your personality. The former is clearly more important than the latter.
• The two are almost always mutually exclusive. The methods that work are not those that make sense, feel comfortable, and are easy to implement. If they were, a lot more people would be successful.
• There are four things you should do: Develop a proven trading model. The emphasis is on proven. That’s your trading plan. Raise enough capital to trade it. Overcome your fear of losses. Finally, forget about having opinions on the markets. Just follow your model.

• If you’re out of balance, you’re going to make bad decisions, and trading the market is a decision game
  • If you’re overtrading, you’re out of balance
  • If you’re overcommited, you’re out of balance.
  • If your dollar risk is too high, you’re out of balance.
  • If you’re hung over, you’re out of balance.
  • If you’re sick, you’re out of balance.
  • If you need the money, you’re out of balance.
  • If you make too much money, you’re out of balance.
  • You’ve got to take time off. You can’t trade every day.
• Pay more attention when you account size gets bigger
  • I’ve noticed over the years that when my account has been small for whatever reason, I have been really careful with it. I watch it like a hawk. When my account gets rich, I tend to fall into a habit of neglect. I’m making money. I have profits, and I’m more comfortable. I don’t keep as close an eye on it. That’s very foolish.
• Take profits out of your account
  • You should spend some profits rather than letting the money stay in your account indefinitely. That’s been important to me over the years. I withdraw money from time to time and take a vacation or buy a new car. From a behaviorist’s standpoint, it gives a sense of reward. It provides conscious and subconscious motivation.