Part 3 — Risk Control: The Most Important Part of Your Job

What if the way most traders enter a position is exactly backwards?

Most people place a trade believing they are right, then hold on and wait for the market to prove them wrong. We are going to do the opposite.

We assume we are wrong the moment we place a trade, and we only hold a position that actively proves us correct. That one change protects your account from the surprises that quietly drain most traders.

Here is the part new traders find hard to accept: your job is not to make money. Your job is to control risk. The profits follow once the losses are kept small.

This whole section is built on two rules from the book Phantom of the Pits by Art Simpson.

Rule #1 — assume you are wrong when placing a trade, and reduce or remove your position unless it proves you correct.

Rule #2 — press your winners correctly, without exception.

These two rules are so important that I dedicate this entire part of the course to them. Work through the risk control lesson, then sit with the live reading of Phantom so the ideas sink in.

Learn these before you ever trade with money you cannot afford to lose. There is no reset button once the account is gone — I know, because I emptied mine twice before this finally clicked.

Your next step is the most valuable few minutes in the whole course.

Read the two rules — Risk Control

Trade safe, and keep those losses small. Cheers.