BiographyGeorge Kleinman, President of Commodity Resource Corp. (CRC), has been trading futures and commodities since 1977 for himself and on behalf of individuals and commercial clients. The Company specializes in financials and metals futures. George entered the business with Merrill Lynch Commodities and was a member of their 'Golden Circle' (top ten commodity brokers internationally). In 1983, George founded CRC in order to offer clients a more personalized level of service, and has been highlighted for trading performance in national publications.
George has been an Exchange member for over 15 years; currently a member of the New York Mercantile Exchange, COMEX division. George is the author of Commodities Futures and Options; A Step by Step Guide to Successful Trading 2nd ed. published by the Financial Times Group (January, 2001), and the Executive Editor of TRENDS IN FUTURES the flagship newsletter of Futures magazine.
Books by George Kleinman
Overtrading - your greatest enemy.
W. D. Gann termed overtrading the 'greatest evil'. He felt it was the cause of more losses than anything else, and who are we to disagree with one of the masters? The average novice trader really doesn't have a clue as to how much money is needed to be successful, and he or she invariably buys (or shorts) more than prudence dictates. His analysis may be correct, but due to too big a position there is a forced liquidation when the margin clerk calls. How often does the money run out just at that critical time when it is ripest to enter? The overtrader is exhausted and misses the profit opportunity he had once seen clearly in those more optimistic days.
When in doubt get out!
If the market has not started to move in your favor within a reasonable amount of time, get out. Your judgment will deteriorate the longer you hang on to a losing position and at extremes you will do the wrong thing. One of the old timers once said something to the effect, 'I am prudent enough not to stand in the middle of the railroad tracks while I try to decide if the headlight I think I see is a freight train or an illusion.'
Never average a loss!
Averaging a loss may work four times out of five, but that fifth will wipe you out. It is a bad habit to get into. Look at it this way: if you make a trade, and it starts to go against you, then you're wrong (at least temporarily). Why buy or sell more to potentially compound the problem? Stop the loss early before it is eternally too large, and don't make it worse.Taken from The Global-Investor Book of Investing Rules