Tip #3: The focus is not on winning. It’s on not losing.

Making money is the goal of trading, so it makes sense for new traders to focus on making money from the markets.

They ask questions like these:

👉How can I make the most money?

👉Which strategy is the most profitable?

👉What leverage can I take on to maximize my earnings?

But these are the wrong questions to focus on. With luck, anyone can make money. But it takes more than a chance to make money without running the risk of ruin.

Take note of the next line:

"The risk of ruin is the probability of ruining your trading capital to the extent that you can no longer execute your trading plan. The key is to stay in the game long enough so that you can profit."

Emphasis should be placed on the need to preserve your trading capital.

"I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have"- Paul Tudor Jones

An obsession with risk and how much you can lose is the hallmark of professional traders and investors.

Joel Greenblatt applied a risk-based mindset to his position-sizing decisions which enabled him to set stop-losses logically

"My largest positions aren’t the ones I think I’m going to make the most money from. My largest positions are the ones where I don’t think I’m going to lose money"- Joel Greenblatt

An intuitive focus on profits creates a tendency to trade positions that are too large and risky, no wonder, A top Trader suggested cutting your positions by half. This advice might sound simplistic, but it highlights a real and common problem of overtrading. His exact words were;

'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'.- Bruce Kovner

What are your thoughts on counterintuitive tips 1-3 shared from the financial markets global Top Traders?

Feel free to respond in the comment Section.

If you missed tip 1& 2, click the tagged post below to go read