Everyone has heard to “Let winners run and cut your losers short” but what does that mean? The core of this statement is positive expectancy. If you trade a system that has a positive expectancy then you will make money the same way that casinos make money because the odds are on their side. Casinos do not allow people to walk in and drop a million dollars on black on the roulette wheel, table limits is their form of risk management. Traders can get the odds on their side also if they can control bet size and trade a system that puts the odds in their favor. If you develop a plan that has a 3:1 reward/risk ratio then ... (full story)