The first rule of trading - there are probably many first rules - is don't get caught in a situation in which you can lose a great deal of money for reasons you don't understand.
Bruce KovnerWhenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I'm getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis... I never think about [stop vulnerability], because the point about a technical barrier - and I've studied the technical aspects of the market for a long time - is that the market shouldn't go there if you are right.
Bruce Kovner