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Risk only what you can afford to loseYou've probably heard this advice before, but it may not be so obvious what this means. No trading system is totally safe, no matter how well it has performed in the past. If you were to lose the money you trade with, what would happen? If the loss meant that you would have to work an extra month before you retire, you can probably live with that. But if the loss meant that you couldn't pay the mortgage next month or that you couldn't buy food for your family next week, then I believe that that would be too high a price to pay. |