I guess a corollary of that would be: When things aren't going right, don't push, don't press. Yes. After all is said and done, you have to minimize your losses and try to preserve capital for those few
instances when you can make a lot in a very short period of time. What you can't afford to do is throw away your
capital on suboptimal trades. If you do, you will be too debilitated to trade when the right position comes along. Even
if you put the trade on, it will be relatively small because your capital will have been depleted by the other trades.
Was the 1973 soybean market your first really big market? I made enough money in that market to go to the Chicago Board of Trade the next year. I didn't make my
money by just going long soybeans. I was basically a pit trader, who traded in and out a lot. The markets were very
good, because there was excellent order flow. It was a great time to be in the pit.
So it wasn't so much catching the trend. It was more a matter of scalping the market successfully. Also, so many people would make incredibly bad trades just to take a profit. They would get out even though
the market was locked limit-up and almost sure to go up the next day. They couldn't stand the profits burning a hole
in their pocket. I would try to get in when they were getting out.
It sounds like easy pickings. There was some amount of risk, but if you were disposed to going with a strong trend, it was a deal. They
were giving you an edge to do it.
Giving you a high probability that the next day you would be ahead? You have to remember some of these markets went up the limit ten days in a row. Most people thought that
even four or five consecutive limit-up days was impossible.
In situations where a market goes limit-up, limit-up, limit-up, at some point, the market may open limit-down. How do you recognize or sense when not to buy at limit bid? It's just an odds play. There is a lot of volatility in the outcome, but you know the odds are in your favor when
you go long at limit bid.
