Summary
Randomness cannot be eradicated. So, stop fooling yourself by pretending to predict anything. When the markets throw lemons, those who learn to make lemonade for their investors stay business.
In this chapter, we started by considering the psychological impact of exiting a position, and some steps to overcome your unwillingness to cut losses. We then explored six techniques that will improve your trading edge. Five of them deal with exits, one with entry, the objective being to shorten the left tail and elongate the right one. This is accomplished by trimming losers and letting winners run beyond your comfort zone.
Next, we will consider another important part of any strategy—position sizing.
