By Financial Tap

The following is a brief excerpt from the premium mid week update from the The Financial Tap, which  is dedicated to helping people learn to grow into successful investors. They offer a FREE 15-day trial where you can experience their proprietary cycle research, weekly updates, and real time alerts.

A quick note on patience.  I know many members are probably looking for more trades or conviction from this market.  I will stress however that this is not an environment to go searching for trades; there is currently just no edge to any setup here.  We just need to accept that these lulls or “murky periods” do occur in the markets and trading them offer few if any advantages.  Your number one priority must always be to preserve and protect capital.

From the Top 10 Investment Rules section of the FTU.

4. Protect Capital First, Worry about Winning Trades Second.

A natural extension of #3, protecting capital is the single most important step in wealth management.  All the winning trades and gains are worthless if you give it all back in a few lousy portfolio busting trades.

Avoiding losses is all about letting go of the having “to win every trade” mentality.   Once you fully understand that you don’t need to win every trade and that missing a rally is just fine, then you will be able to cut your trades without regret and while they are still small losses.  If you can ensure that your losses are always kept small, then your winning trades only need to be small just to break even.

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