In 1983, I set up Caxton Corp. Its been an interesting and happy ride since.

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.

If you don't work very hard, it is extremely unlikely that you will be a good trader.

In 1983, I set up Caxton Corp. Its been an interesting and happy ride since.

Risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.

Whenever 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.

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose