The All-American TraderQ: Speaking of discipline, would you say that trading is really
about entries or exits? Clearly it’s both, we all know that. But does
the edge lie in the entries or does the edge lie in the exits?
A:Exits.
Q: It’s how you manage your exits that ultimately turn you into
a winner or a loser.
A: That’s right.
Q: Any particular insights as to how people should manage their
exits that you might care to share?
A: Do not let it get way out of control. It’s easier said than done
but you can always reenter.
Q: But you can never get back that one catastrophic loss.
A: That’s right [laughter].
Q: Final questions that we ask everybody. Your number one rule
for trading, if you were to boil it down to one thing?
A: Discipline. I don’t know how many times and how many guys
I’ve worked with that hang onto their losers and they get into this
hope mode. They think it’s got to come back. But no it doesn’t
have to come back. Discipline. I’ve got discipline posted in big
black letters, right here on my desk,discipline.
Q: Even though you hate to lose, are you perfectly willing to cut
your losses when it’s necessary?
A: Right. I’m a gracious loser. I mean if someone beats me on
the course, I’ll shake their hand. But I’m mad that I lost and I want
to understand why I lost because it’s all in your head.