Know Where You Get Out Before You Get In

Analyzing the quote “The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” – Ed Seykota

Whoa, captain Obvious here telling us that in order to win we must not lose.
But, where? Where do I cut my loss? This is the million dollar question. If it was only that easy. Cut that god damn loss. Right?
This quote is similar to “Letting losses run is the most serious mistake made by most investors” and it also only applies to a certain trading style. And only after you master that style. Then these quotes will probably make sense. For the most part I think these quotes are not useful… at all. To learn more about trading – price action trading from will help you.

When I trade, I know exactly where I will get out before I get in. And it’s not a magical or a made up and a subjective level where I begin to feel uncomfortable. Oh no, it’s clear, precise and not prone to guesswork and f*ck ups. I get out where price says I get out.

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