We need principles to operate efficiently. Guidelines of conduct that we
follow and respect. Ray Dalio is a good example: he has his own and
that have made him a highly successful manager. I have 67 principles
that have served me remarkable well.
Principle one: about DEFENSE and PROTECTION:
The important thing is to defend what we have. Losses are never
allowed to run, for any reason or idea or projection. I always act with its
corresponding Stop-Loss, I keep in mind that markets can betray. I
never turn off a S-L. I never take a position that I cannot afford to lose.
How can I hesitate to cut a loss when I know anything can happen?
A Market Principle, better than Ray Dalio's
Principle of an Implausible Trajectory (IT): From time to time, the Mkt
describes an IT that is detected by counting the number of times the
index crosses the center line between the high and low of the day, 20
crossings or more.
This IT represents a highly erratic and fractured market with unknown
direction, which invites the amateur to try to guess a trade. If the naive
operator falls for such a fortune teller's invitation, he will be shattered
and confused: I don't know what happened!