Summary about Mistake in Trading "Using too much Leverage"

In any endeavor there are certain objectives that must be achieved in order to succeed. Yet before you can even think about winning you have to first put yourself in a position to win. To win a war you must advance your troops and take up land. Yet an army that refuses to ever acknowledge the order to retreat is unlikely to survive. To win in auto racing you must be the fastest driver. But a racecar driver who refuses to ever slow down is far more likely to crash than to win a race. In professional poker you need to win a lot of hands in order to make a living. However, a professional gambler who refuses to ever walk away from the table will eventually lose all of his chips.

In the end, risk control will not single handedly win the war, the race, or the game for you. Yet without proper risk control you have no hope of winning. Therefore, the only way to win the war or the race or the game is to do what must be done in order to ensure your long-term survival. And that is what risk control is all about. Risk control is what keeps you in the game long enough to have a chance to win.

This is true for any risky endeavor and futures trading is no exception. While cutting a loss and exiting a trade does not get you closer to your goal of making x-dollars, it does keep you from getting further away from that goal. The same holds true for all of the risk control measures discussed in this section. While employing these steps may not directly put money in your pocket, they do allow you to stay in the game long enough to accomplish your objectives. Conversely, refusing to employ effective risk control measures can ensure your long-term failure.

Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor

Using too much Leverage
Determining the proper capital requirements for trading is a difficult task

Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure

Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader

Useful Advices to Beginning Trader
You can control your success or failure

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