Rule #1: "Scratch Trade is a Winner."

We teach how not to lose money! The key is a defensive strategy. Traders try to predict the market but we live in an ambiguous world. If you buy and the market doesn't move, you SCRATCH the TRADE. Scratch means that you buy and sell at the same price and vice versa. You can always get back in. You did not lose money!

Rule #2: Never add to a losing trade.

Adding to a losing position is serious error in judgement. You cannot predit which way the market will go. You are letting your emotions dictate to your professional judgement.