Market Wizards: Interviews with Top Traders

by Jack D. Schwager

I think the secret is cutting down the number of trades you make. The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone.

Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers.

In the interview, Marcus stressed that letting winners ride is every bit as important as cutting losses short. In his own words, “If you don’t stay with your winners, you are not going to be able to pay for the losers.”